Thursday, January 6 2005 12:00 Hrs (IST) - World Time -

New Delhi: Favouring financial sector reforms to foster high 8 per cent growth, the Government said today (Jan 6, 2005) it would shortly set up a regulator for pension sector and announce the roadmap for banking reforms, which includes allowing 74 per cent FDI in private banks.

"We can have 8 per cent growth. The question is how to create a financial sector which can foster 8 per cent growth," Finance Minister P Chidambaram said at a conference organised by IRADe-IIEF in New Delhi today.

Stressing on better risk management, he said, "With insurance and derivatives, risks are controlled, which increases the viability of projects and foster higher investment rate. This in turn leads to higher GDP growth."

Referring to the Common Minimum Programme, he said there was a need to strengthen the financial sector regulators and run it professionally to foster competition.

Observing that SEBI and IRDA have brought about tremendous energy in the financial sector, he said, "Pension Fund Regulatory and Development Authority will be set up within a few weeks. With SEBI and IRDA, the PFRDA will more or less complete the financial architecture."

Chidambaram said most of the earlier reforms had been carried out on a "trial and error" basis and that "I will ask SEBI, IRDA and PFRDA to adopt the best practices."

Commenting on the suggestion that the country could have a super regulator like Financial Services Authority of UK, Chidambaram said India was perhaps too vast a country to have a single regulator but it was necessary to strengthen the existing regulators and ensure that they work together.