India needs to do much more to attract investment in the sector and all states should adopt user charges, Mr Sinha said at a session Second Wave of Economic Reforms in India: The Outlook for 2002 at World Economic Forums annual meet in New York.
Mr Sinha said the government will adopt the recommendations of the Fiscal Responsibility Bill during the current Budget. Fiscal deficit has to be kept under control as part of second generation reforms.
The session, organised jointly by the Asia Society and Confederation of Indian Industry (CII) was attended by a large number of US business representatives.
Human resources will be another focus area in the second phase of reforms.
On the positive side, the finance minister said India had traversed a great distance in the reforms process and cited the example of the opening up of insurance sector as a major achievement, which effectively concluded the first generation reforms.
Mr Sinha said an area of reforms that is going relatively unnoticed is the roads sector. The government has collected seed money required to raise international finances by imposing a cess on petrol and diesel. Around 6,000 km of the North-South, East-West corridor has already been sanctioned under this scheme.
The privatisation programme too was progessing well. Videsh Sanchar Nigam (VSNL) and IBP will be privatised by March 31 and privatisation of several other companies such as Air India and Shipping Corporation of India are on the anvil.
The finance minister, however, pointed out that there is a need to set new rules of the game. While the government withdrew from certain areas, it will not allow a free-for-all in these sectors. The government will set up independent regulatory authorities such as the Telecom Regulatory Authority of India and the Insurance Regulatory and Development Authority to act as arbiters and umpires for these sectors.
Andhra Pradesh chief minister Chandrababu Naidu, in his address, said his vision is to make the state a Knowledge State with Hyderabad as the Knowledge Hub.
Information technology was being used extensively to empower the people of the state. The state government is making efforts to move towards e-governance by providing one stop services on the Internet, he added. Mr Naidu said IT is being used to cut down on corruption by bringing in greater transparency. His government is also planning to enact a Right to Information Bill soon.
A Centre of Good Governance is being set up to train legislators and bureaucrats, he added. The state government is also looking towards promoting other knowledge-based industries such as drugs and pharmaceuticals.
On second generation of reforms, Mr Naidu said the areas that needed urgent attention are labour laws, infrastructure sector reforms especially in power sector, population control and reduction of non-Performing assets of banks among others.
CII president Sanjiv Goenka, in his welcome speech, said CII believes that 2002 will witness a stronger economic growth and hoped that the reforms process will gather greater momentum during the course of the year.