Proposes $5-billion infrastructure development fund
To improvephysical infrastructure.
Push toreforms in power sector.
Open upretail for more FDI.
New Delhi, March 3
The US-India CEO forum report today identified six major areas for co-operation, including infrastructure and energy security.
It mooted measures ranging from creation of a $5 billion infrastructure development fund to easing restrictions for foreign investment in India's banking, insurance and retail sectors.
The report released by Mr William Harrison and Mr Ratan Tata, co-chairs US and India respectively of US-India CEO Forum, identifies key initiatives that need to be undertaken by the two Governments and by industry partnerships.
"I think there is lack of excitement about investing here because of factors such as poor energy supply, roads, airports, ports, the core infrastructure and bureaucracy... it's hard to get approvals, permits and in the legal system, the process is slow and cumbersome and it takes a long time for settlement of disputes," Mr William Harrison, JP Morgan Chase & Co Chairman and forum co-chair, said.
In its proposals for improving physical infrastructure, the report said, "The US could partner India in making Mumbai into a regional financial centre. This partnership could extend from the `softer' aspects such as an appropriate regulatory framework, to the `hard' aspects of identification of infrastructure needs and participating in their financing."
It said the proposed $5 billion infrastructure fund could act as a vehicle for US investment in Indian infrastructure.
"It is proposed that a corpus of $5 billion be targeted, with minority Indian Government participation, and leveraging the expertise of the World Bank/IFC/ADB and other financial institutions in the selection and monitoring of investments," the report has said.
Reform power sector
On the issue of energy security, it said India should move more aggressively in reforming its power sector to ensure sanctity of contracts, encourage greater investment/competition in generation, promote market driven tariff structure and achieve a separation of regulatory and adjudicatory authority.
"The opening up of civil nuclear technology supplies from the US to India, which is currently on a government to government track, will not only bring the prospects of energy self-sufficiency to India but open up a significant flow of technology exchange and build mutual trust between the two countries," said the report which was submitted to the US President, Mr George Bush, and the Prime Minister, Dr Manmohan Singh.
The report also sought a decision to expedite FDI in the Indian retail sector beyond the current limited opening up. It said as an immediate first step, Government could permit FDI in retail in all SEZs and/ or permit joint ventures in retail with minority foreign investment. "Accelerate the timetable to raise FDI caps in the Indian insurance sector and allow foreign FDI in Indian private sector banks as well as an accelerated approval of foreign bank applications for Indian branches," it said.