SEBI chief expresses anguish over delay in reforms

Mumbai, Jun 8: Anguished over delay in key reforms for "years and years", SEBI Chairman UK Sinha today said there is an urgency to revive investor sentiment and arrest the faltering growth.

"Some of the reforms, which have long been pending and one example being pension reforms... It has been years and years that some of these reforms...Are yet to come through," Sinha said at the Skoch Summit here.

Listing out the steps that are needed urgently, he said, "We all know what happened to FDI in retail, the pension Bill, and the pension reforms are yet another example."

The pension reforms bill was deferred by the Cabinet yesterday in the wake of opposition from UPA ally, Trinamool Congress.

Calling for an urgent need to revive investor sentiment and economic growth, he said, "... That is something all of us have to counter very seriously, that how long can we go on deferring this... We cannot become complacent about policy making and implementation domestically."

The country can still tide over the growth deceleration if some of the urgent reform measures are taken and the issues plaguing the implementation resolved.

Sinha said, "If we start making some progress on these things (reforms), then in spite of the forecast about our economy coming down from the higher levels of 2007-08; if these policies change...Start happening, we can again come to levels which are commendable in comparison to any part of the world. (But) those changes have to take place."

Admitting that a part of our problems are imported, Sinha, however, said, "We cannot become complacent about policy making and implementation domestically."

Stating that there is no reason why even private parties are not able to implement their projects on time, he said,

"I am bewildered that if an agreement has been signed between a raw material supplier and a utility, why it is not being honoured."

According to a CMIE estimate, as many as Rs 5 trillion worth of projects, mostly in the power and steel sectors and running into 500 projects, were stalled in FY12 due for want of mandatory clearances, fuel, raw material linkages, etc. Listing out the reform steps that are needed urgently, he said, "We all know what happened to FDI in retail, the PFRDA Bill, and the pension reforms are yet another examples.

"Passing the PFRDA Bill is not an end in itself, in my view it will serve a purpose, but a limited one. The more important thing is the largest pension funds in the country, which are being managed under a Central law, are they being reformed or not? The Pfrda Bill will not reform that," he said.

Yesterday, the government deferred the Pension Bill, that seeks to open up the sector to foreign and private investment, as the key ruling front ally Trinamool Congress put a spanner on the Regulatory and Development Authority Bill of 2011.

Noting that the EPFO has 40 million accounts amounting to a whopping Rs 2,00,000 crore in funds, Sinha said, "If a small portion of that money starts coming into the market, (it means a lot, but) that money is not coming, that reform is not happening."

Regretting that the high interest rates that the EPFO offers is hurting the whole sector, he said the corporates which manage their own pension funds are not able to match the interest rate announced by the EPFO and have to fund it by themselves.

PTI