raise funds, and no one has been able to convince the Standing Committee that increased FDI is the only way out.
You’ve said somewhere that after the global financial crisis, everyone is looking at financial sector reforms differently.
But shouldn’t this apply to, say, complex derivatives that few understand, and not to insurance and pensions where, in any case, if the regulator doesn’t do a good job, even 100% Indian firms can get away with fraud.
You can’t keep regulating everything and assume all fraud will get caught. We still have banking and stock market frauds despite good regulators in both areas.
So does that mean we ban FIIs to prevent stock market frauds?
I’m not saying that. In the context of higher FDI in insurance, I’m saying big global insurance firms got caught doing what they shouldn’t have been doing. So we need to be a bit cautious. There is a time for everything, a political environment. I spoke of labour market reforms in 2001, but nothing happened since the time wasn’t right.
Will we able to get other bills through, the Banking Regulation Act for instance?
It can go through if the government agrees to a voting cap of 26% irrespective of the level of shareholding.
So you’ll allow this bill through, which will allow RBI to start processing bank licence applications?
There are 12 pieces of legislation that the Standing Committee on Finance has given its view on, and 11 of these haven’t even been brought before Parliament, and that includes the Companies Bill, so don’t lay everything at the Opposition’s door—and may I reiterate the Standing Committee has more UPA members than Opposition ones.
You say the government is changing the goalposts. What does that mean?
The DTC is a good example. The Standing Committee made a lot of suggestions on GAAR, but Pranab didn’t wait to even consider these and just went ahead. Now, his successor has asked Dr Parthasarathi Shome to give a report on this, and we read he’ll send a note to the PM on this in 10 days. Where does the Standing Committee come in on this?
In the case of the Companies