The government was fully committed to financial sector reforms and would push for key amendments in various bills in Parliament, said finance secretary Ashok Chawla. There are seven bills that require Parliament’s stamp of approval to kick in reforms in the financial sector. These would be introduced in the Parliament, Chawla said.

Some key changes that financial sector is looking at include proposals for pension sector reforms, changes in banking regulation law that gives equal voting rights to foreigners in private sector banks and increase of foreign direct investment in insurance companies from the current 26 per cent to 49 per cent.

Talking on disinvestment, the finance secretary said a blueprint would be out in three to four weeks. The government plans to offload stakes first in listed public sector enterprises to raise funds. However, the proceeds from the sales were not budgeted to cut the deficit, he said.

On the ballooning government-borrowing programme, the finance secretary reaffirmed that the record borrowing of over Rs 4 lakh crore would only have a marginal impact on yields and won’t drive rates too high. “The time is not ripe to reverse the expansionary monetary policy and the government’s aim is to keep interest rates benign. The government will start reducing its budget deficit from next year,” he said.

Borrowings surged this year as the government stepped up spending and widened the fiscal deficit to 6.8 per cent of the gross domestic product — the highest in 16 years. “I don’t expect it to go beyond 7 per cent,” Chawla said, adding the deficit would start coming down after the government started unwinding some of the stimulus spending from next year.

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