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|February 22, 1999||
Insurance bill will benefit India, says President
President K R Narayanan said the Insurance Regulatory Authority Bill is intended to strengthen the insurance sector and that it would enable the country to seize opportunities that globalisation is offering. Similarly, several steps have been taken to revitalise the handloom, handicrafts and small-scale industries sectors.
Painting a grim economic scenario, Narayanan today called for tight control over ''wasteful and low priority expenditure'' and suggested reduction in fiscal and revenue deficit to restore the health of the economy.
Addressing a joint session of Parliament on the opening day of the Budget session, which witnessed uproarious scenes, the President said the finances of both the Central and the State governments are under severe strains.
Pointing out that this would have a serious inflationary potential, he said, ''This will cause severe consequences for interest rates, investment and growth. It is therefore critically important for both the Central and State governments to restore health to their finances by reducing the revenue and fiscal deficits. This calls for a determined effort to mobilise resources, including appropriate cost recovery policies.''
Narayanan, however, said that in spite of considerable volatility in the currency markets elsewhere, the Indian rupee remained stable within manageable exchange range. The gross domestic product growth rate has been one of the highest among the developing countries, the foreign currency reserves have touched $ 27.9 billion as on February 17.
He said the Indian economy has had to face a very adverse situation owing to a general slowdown in the global economy as illustrated by the sharp decline in global trade. This led to declining capital flows to emerging markets. Many inherited bottlenecks in the domestic economy compounded these external challenges, he noted.
The government has delicensed industries like coal, lignite, petroleum products, sugar and certain bulk drugs. It has also liberalised technology imports by allowing automatic clearance for projects that have poor track record. This will give required impetus to the economy, he observed.
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