Ports
33. Coming to the port sector, I am glad to report that
policy initiatives designed to increase private sector participation in ports have also
been successfully implemented. Overall, capacity in Indian major ports is expected to go
up to 314 million tonnes this year and further to 376 million tonnes by the end of
2001-2002, along with substantial capacity addition in minor ports. There is now adequate
capacity in major ports. Ships no longer have to wait for berths as was the case before.
34. Ennore port has already been corporatised and Jawahar Lal Nehru Port in New
Mumbai is next, and with experience, other major ports can also be corporatized, enabling
them to raise resources in the market. Successful investment is being enabled by the
setting of economic tariff levels. With the formation of the Tariff Authority for Major
Ports, these tariffs are being rationalised further on a continuing transparent and fair
basis.
Financial Sector and Capital Markets
35. A great deal of progress has been made over the last few years in
pursuing reforms in the financial sector and capital markets. I propose to continue reform
in this sector.
Debt Market
36. The Indian equity market is the oldest in Asia. Since the creation of SEBI much
greater transparency as well as automaticity has been introduced in the working of the
equity market. The need now is to develop and deepen the debt market. This will be of
great benefit to small investors and institutional investors alike. The infrastructure
sector will be enabled to raise long term funds, particularly with the opening of the
insurance sector.
37. In order to further develop a transparent and active debt market in general,
and the Government securities market in particular, I propose to take the following
measures:
A Clearing
Corporation will be set up under the active encouragement of the RBI, with State Bank of
India as the chief promoter, and is expected to be in place by June 2001. It will also
enable settlement of forex transactions.
Trading of
Government Securities, through order driven screen-based system will be implemented.
An electronic
Negotiated Dealing System will be set up by the RBI by June 2001 to facilitate transparent
electronic bidding in auctions and dealings in Government securities on a real time basis.
In order to
ensure smooth and quick movement of funds, the Electronic Fund Transfer (EFT) and
Real Time Gross Settlement Systems (RTGS) are being put in place by the Reserve Bank of
India within the next year.
Clarifications
are being issued by CBDT to promote the issuance of STRIPS, zero coupon bonds, deep
discount bonds, and the like.
The old Public
Debt Act will be replaced by Government Securities Act.
Comprehensive
legislation will be introduced on securitization.
38. I propose to set up a small group comprising the Reserve Bank of India, SEBI,
the stock exchanges and Ministry of Finance to monitor and implement these developments so
that the debt market becomes active next year.
Banking Sector
39. Banking sector reforms have proceeded apace in a phased manner over the past
decade. However, the problem of non-performing assets with banks has continued. Special
attention is being paid to recovery of NPAs:
1. Public Sector
Banks have recovered Rs 800 crore of NPAs from 2 lakh accounts in 2000-01.
2. Net NPAs as
percentage of net advances were almost half at 7.4 per cent in 1999-2000 compared to 14.5
per cent in 1993-94.
3. 22 Debt
Recovery Tribunals (DRTs) and 5 Appellate Tribunals have been established.
4. 7 more DRTs
will be set up during 2001-02.
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