This was music to the ears of American insurance companies, particularly world leader American International Group (AIG) that has been trying to get into the Indian insurance market for years and has carried on a sustained lobbying campaign through its external affairs pointman, former US Ambassador to India Frank Wisner.

Sinha was speaking at a luncheon meeting, attended by nearly 200 executives, organised by the Confederation of Indian Industry (CII) and the US-India Business Council (USIBC) and sponsored by AIG and Enron Corporation.

Sinha, here to attend the annual meetings of the World Bank and the International Monetary Fund (IMF), said, "You are all aware of the fact that....the legislation (for the insurance sector) got derailed by almosta width of a hair. It was already listed in the business of the lower house (of Parliament), but unfortunately before it could be taken up for discussion, the house itself got dissolved." But, he declared to sustained applause, "if we were to get back to power and I were to become the finance minister for a third time...., perhaps in the first three days, the agenda will be to get the insurance regulatory authority through." Sinha said besides the insurance legislation, about 14 other pieces of "progressive legislation which are pending before the Indian Parliament" would be pushed by the government so that they could be taken up for discussions "and passed through the house as quickly as possible."

"This will include also the replacement of what is known as the Foreign Exchange Regulation Act by the Foreign Exchange Management Act and the entire shift from criminal to civil liability for any infringement of the foreign exchange regulation," he said. In the industrial sector, Sinha said, "our effort willbe to completely eliminate the various levels of approvals for both domestic and foreign investments. We would like entrepreneurship to be freed of the shackles of government control." With regard to financial sector reforms, he said it would be the government's "policy to reduce government control over the financial institutions and make them more autonomous so that they can regulate their own affairs and take their own decisions without government control or excessive parliamentary control."

In this context, he said the government would reduce its equity holdings in these banks to below 50 per cent "so that we move in the direction of privatisation." Sinha, however, acknowledged that "we will have to move cautiously because of the powerful trade unions in the banking sector. We have been able to tackle them in the insurance sector, but I am not sure in the banking sector." On capital markets, Sinha explained that the effort would be to bring the "small Indian investor back into the market" and this wouldbe achieved through mutual funds that would envisage these investors to "come into the market in a big way." The minister noted that in the financial sector, integration with the rest of the world has taken place in India as regards world class standards, norms of disclosure, transparency, non- performing assets and hence "Indian banks compete with the best in the world." "All in all," Sinha declared, the idea was to "move towards lesser and better governance," with the role of the government being "reduced to the extent possible."

He said the term being coined at the World Bank/IMF parleys was "the right-sizing of government, not necessarily down-sizing." Sinha said India's international leadership in information technology proved that "computers and curry go very well together". "We have a special knack in this field, which we fully expect to exploi," to propel India into the new millennium, he said.

He said poverty in India would be eradicated by 2020, particularly since "the idea is to push thegrowth rate during the next five years to an average of eight to nine per cent." "For this purpose it's essential for us to increase domestic savings rate and invite more foreign capital," Sinha added.

"We regard higher growth rate as an absolutely essential part of our poverty reduction plan." Sinha emphasised that simultaneously a major priority would be to radically improve the rural economy.

He conceded that the growth rate in 1998-1999 of six per cent was "largely on account of the strong performance in the agricultural sector."