Government to ensure speedier resolution of contract disputes: Finance Minister Arun Jaitley

HONG KONG: Promising a slew of reform measures to improve ease of doing business in India, Finance Minister Arun Jaitley today said the government has readied a new law to ensure that disputes get settled through arbitration within six months.

Besides, the draft of bankruptcy law is almost complete and would be soon taken to Parliament for approval, Jaitley told a grouping of international investors with collective Asset Under Management of $10 trillion, while rolling out a red-carpet for them to invest in infrastructure, manufacturing and other sectors.

Listing various reform measures undertaken by the government, Jaitley said it has also opened up foreign investment in the infrastructure segment of Railways, which has been a "touch me not sector" so far and a large number of investors are now showing interest.

He also expressed confidence that India's ranking would be much better when the World Bank releases its next ranking of countries in terms of ease of doing business. India was ranked very low at 140th position last year.

"Ease of doing business is still a work in process. Significant advancement has been made, a lot will have to be done of course on a continuous basis.

"On bankruptcy law, the drafting is virtually ready and I intend to take it to the Parliament in the near future. There have been long pending disputes, so a system of fast track arbitration, so that a dispute gets settled within six months, a law is ready and it will be introduced in Parliament.

"Resolution of contracts with regard to public contracts, which has held up several unfinished projects, and therefore one of our priority is to finish those projects, that process itself is on. Allocation of public contracts and public procurement, to bring transparency in the system, on this also a law is being planned," he said.

Jaitley said the road map and priorities of the government has been been very clear.

"We have opened up almost all significant sectors of the country, including defence manufacturing. We have settled the long standing issue of insurance sector not adequately opening up. We had to amend the law through Parliament and the sector is now seeing a lot of investments trickling in.

"We have liberalised the norms with relation to real estate, so that the impact is felt in smaller towns and smaller projects too. We have opened up infrastructure as far as railways is concerned.

"I think this was a touch me not sector as far as Indian economy is concerned and therefore induction of a lot of international capital in infrastructure areas of the railways is going to be extremely important," he said.

Speaking at the APIC-India Capital Markets and Institutional Investors, Jaitley said India always had large amounts of natural resources, but it was always struggling on the policy front for allocation of these resources.

"It remained bogged down by controversies in the past including in coal, spectrum and minerals. The government has in the last few months, framed policies amended the laws and put in place auction mechanisms," he said.

The minister said a very large part of the resources have come from tribal regions which were among the least developed and therefore the government has diverted the money for the development of those tribal areas.

Jaitley said an "important complaint and at times a real complaint" about India used to be that the doing of business was somewhat complicated and therefore procedures needed to be simplified.

"As part of competitive federalism and to make it easier, states' rankings have come out which will help investors understand which is a better place. India as a whole is trying to improve its ranking and I have no doubt that as and when the next set of rankings come up we would have seen that our ranking has improved significantly," he said.

Listing out other reform measures for making India an easier place to do business, Jaitley said the clearances from Foreign Investment Promotion Board (FIPB) have been simplified and they are almost at the current level.

"The environment clearance which used to be held up for years are almost clear depending upon the policy regulations as fast as possible. States have framed single window clearances and therefore states have also been additionally empowered.

"In fact starting from the current year from the central pool of taxes, every state gets 10 per cent extra. They used to get 32 per cent of central revenue share which has been increased to 42 per cent," he said.

Talking about the road ahead, Jaitley said he sees several reform programmes of the government continuing.

"I always believed that the economic reform will be an ongoing activity. There is no finishing line as far as economic reforms are concerned. Therefore, the changes in the land rules, so that land is available for infrastructure, for housing -- we have planned 100 smart cities -- and for rural infrastructure including roads and irrigation projects".

"For that, the progressive states themselves have come forward and have said they are willing to make some alterations as far as land is concerned and therefore the central government should permit to do that. We have agreed to do that," he said.