Think big. We worry far too much about risks, we are too anxious with change. And, in the process, we do not tap into the power of our capabilities and the wealth of opportunities available to us. Once again we find such apprehensions being expressed today when we look at new market opportunities. Indians have globally competitive capabilities. We are second to none. We can take on competition, and make good use of new opportunities at home and abroad.’’ That was Prime Minister Manmohan Singh in Lucknow today making one of his strongest pitches for economic reforms in recent times. The timing couldn’t have been more significant. His ally, the CPM, which has been constantly sniping over reforms, today even opposed the revamp of Mumbai and Delhi airports, a day before its Politburo meeting in the capital. Besides the timing of his remarks, their setting, too, was appropriate. And Singh used the occasion—golden jubilee celebrations of the Life Insurance Corporation of India—to buttress his case. ‘‘The entire debate on insurance sector liberalization and the opening up of the insurance market to new products shows us that many of our apprehensions about liberalization are often over-stated,’’ he said. ‘‘For example, in the retail sector, apprehensions are being expressed about opening it up to foreign investment. I am reminded about the kind of apprehensions that were expressed when we first proposed foreign investment in insurance,’’ he said. ‘‘Proving all the doubters of liberalization wrong,’’ Singh said, ‘‘LIC has surged ahead, creating new records, in a more competitive market. Forty-four years of sheltered existence did not blunt LIC’s edge. It retained a combative spirit and has proactively changed itself to meet new market aspirations. I’m glad to know that LIC has more than 16 crore policyholders in its fold and adheres to world standards in claim settlement.’’ In this context, he mentioned the opposition to the R N Malhotra Committee report submitted to the government way back in January 1994 which encouraged LIC to face competition from private players, and said it was the NDA government which introduced a legislation in 1998 which allowed insurance to be opened up to private investment, setting up a cap of 26 per cent for foreign equity, with additional 14 pc for NRIs. He said the ‘‘critics of reforms were confounded by the experience of LIC which showed the inherent capacity for change and competition.’’ That there was a need, not just a wish, for economic reforms was also underlined by Singh when he sounded a warning on the country’s financial health, the rising fiscal deficit and the Rs 30,000-crore loss in the energy sector. “If the fiscal deficit is not reduced, then India is in for a grave economic crisis ahead”, Singh warned. Emphasising the priority areas for the government, Singh reiterated that state governments should focus more on development of infrastructure and provision of health and education. Calling insurance a key driver of infrastructure growth by being a source of long-term funds, Singh called upon the insurance industry to show the necessary dynamism for keeping pace with investment requirements. Inspite of the focus on agriculture and irrigation, Singh said, infrastructure was a constraint and required huge investments in roads, railways, ports, power, civil aviation and telecommunication so that the growth process is not throttled. However, the Prime Minister said infrastructure wouldn’t take off if the power supply wasn’t improved and if losses couldn’t be trimmed in the energy sector. To this effect, he called for reduction in transmission and distribution (T&D) losses and reforms in state electricity boards. All this had to be done, he said, for achieving the objective of giving more free power to rural areas.
