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Economy

DILASHA SETHNEW DELHI

The Narendra Modi govern-ment plans to call for aSAARC bank in the lines of

BRICS bank to take forward itsSouth Asia initiative that startedwith invitations to regional lead-ers to attend the prime minister’sswearing in ceremony in May.

India will propose a SAARC De-velopment Bank at the regionalgrouping’s ministerial council inBhutan starting Thursday, offi-cials said.

“Commerce department hascome out strongly in support ofthe South Asia DevelopmentBank as it will go a long way in fa-cilitating regional integrationthrough financing of infrastruc-ture for trade,” a government offi-cial told ET. “The final call will,however, lie with the partnercountries,” the person added.

If agreed by the partner coun-tries, the bank would be the firstfor the eight-nation regionalgrouping that will provide coun-tries with access to capital to fi-nance infrastructure for trade fa-cilitation and development.

It will be on the lines of the $100-billion New Development Bank(NDB) announced by the BRICSgrouping of Brazil, Russia, India,China and South Africa lastweek. While NDB, to be head-quartered in Shanghai, will fi-nance infrastructure and devel-opment projects across thedeveloping world, the proposedSouth Asia Development Bankwill focus on the eight SAARC na-tions — Afghanistan, Bangla-desh, Bhutan, India, Maldives,Nepal, Pakistan and Sri Lanka.

Experts said the proposed bankcould give a boost to economic de-velopment of South Asia.

“The regional bank could be aturning point in the history of theSouth-east Asian regional eco-nomic development, as it will pro-vide impetus to trade in goods,

services and investment for de-velopment,” said Ram UpendraDas, professor at Research and In-formation System for DevelopingCountries, a New Delhi-based au-tonomous think tank under theministry of external affairs.“Moreover, it will manifest In-dia’s commitment towards the de-velopment of the South Asian re-gion,” he added.

Vikramjit Singh Sahney, presi-dent at SAARC Chamber of Com-merce, said such a bank wouldhelp in funding infra projects andprovide seed capital for intra-SAARC projects such as hydropower.

vehicles to deliver goods in India.India’s exports to the region

grew 15% in 2013-14 to $18 billionwhile imports contracted by8.25% to $2.4billion.

The government official quotedearlier said the proposed bankcould be set up with whatever thepartner countries agree to put inas equity and scaled up later.Something on the lines of addi-tional non-preferential votingrights can also be structured forthird countries who would like tocontribute, including the multi-lateral agencies such as the AsianDevelopment Bank and WorldBank. “There will be countrieswith interest in the region likeChina and Japan, who would liketo contribute towards the cor-pus,” the person said.

India will moot the idea at theministerial council and if allministers agree, it will become apart of recommendations for theSAARC summit to be held in Ne-pal in November, he said.

“Trade facilitation is actually aquestion of finding money. Thatis what the South Asia Develop-ment Bank will facilitate,” the of-ficial said. For example, Nepalcould access the bank for a 40-year loan for its hydro power pro-ject and can do an energy trade onthat, he said.

There is already a SAARC Devel-opment Fund (SDF), incorporat-ed with a paid-up capital of $300million to provide financial as-sistance to social sector and in-frastructure projects. India con-tributed $189 million towards it.

SDF can either become a part ofthe new bank, or it can focus en-tirely on the social sector whilethe bank finances infrastructureprojects.

At the Thimphu ministerial, In-dian commerce and industryminister Nirmala Sitharamanwill also hold a bilateral meetingwith her Pakistani counterpart,Khurram Dastgir Khan, in a firstfor the BJP-led government.

“No country should have an ob-jection regarding setting up of thebank though some lobbyingwould be needed to have thebank’s headquarters in India.But as a big brother, India shouldalso contribute a substantialshare of the corpus,” Sahneysaid.

India has been playing the bigbrother for the region. It has pro-vided duty-free, quota-free accessto the least-developed countriesof the region, barring just 25items under the SAFTA goodsagreement signed in 2006. Thecountry is also looking at givingunilateral access to Bangladeshi

Closer Home, Modi GovtNow Wants a SAARC BankProposed bank could give a boost to economic development of South Asia, say experts

CORPUS:Start small and scale it up laterThird countries and multilateral agencies like ADB, World Bank, etc could contribute to the corpus and get voting rights

India is likely to propose a regional bank at the SAARC ministerial in Bhutan on Thursday

MEASURES:Liberalised visa regime for businessmen and tourists

SAARC Motor Vehicles Agreement

Railways Agreement: Railway linkages for smooth travel and cargo

SOUTH ASIAN ASSOCIATION FORREGIONAL COOPERATION

∙SAARC NATIONSare Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka

∙INDIA’S EXPORTSTo The Region Grew

15% In 2013-14 To

$18 Billion While Imports Contracted By

8.25% To

$2.4 Billion

IT WILL:Fund infrastructure projects in the regionFinance intra-SAARC projects Support trade facilitation measuresImprove regional integration

A Bank for South Asia

YOGIMA SETH SHARMANEW DELHI

The government is set to revivean initiative of its predecessorto make regulators of key sec-tors such as power, telecommu-nications and railways account-able to Parliament, a move thatis expected to boost private in-vestment in infrastructure.

Planning minister Rao InderjitSingh has asked the infrastruc-ture division of the PlanningCommission to finalise the DraftRegulatory Reform Bill, 2013 byincorporating the views of dif-ferent ministries, a senior gov-ernment official told ET on con-dition of anonymity. Theminister is keen to introduce theBill in the winter session to re-vive investor confidence as soonas possible, the official added.

The draft Bill, if approved, willbe applicable to sectors includ-ing oil & gas, coal, internet,broadcasting & cable television,posts, airports, ports, water-ways, mass rapid transit system,highways, water supply and san-itation.

In 2009, the Congress-led UPAgovernment had mooted a law tomonitor the functioning of alarge number of regulatory au-thorities in the country. The gov-ernment’s aim was to ensure or-derly development ofinfrastructure services, enablecompetition and protect the in-terest of consumers through theregulators while securing accessto affordable and quality infras-tructure.

However, the Bill could not seethe light of day during the termof the UPA government.

Last week, admitting that theregulatory commissions in thecountry were accountable to nei-ther government nor Parlia-ment, Singh said in Parliament,“The present legal frameworkon regulatory reforms needssome rethinking. Regulatorycommissions in different sec-tors follow very divergent prac-tices and require re-examin-

ation to have a uniformframework. Our governmentwill undertake regulatory re-forms in order to make them ef-fective and answerable.”

The UPA government had set atarget of $1-trillion investment ininfrastructure during the 12thFive-year Plan (2012-17), half ofwhich has to come from privateplayers. The Regulatory ReformBill is expected to draw privateplayers that have been wary of in-vesting in infrastructure develop-ment for want of transparency.

The key provisions of the draftBill include an institutionalframework for regulatory com-missions, their role and func-tions, accountability to the legis-lature and interface with themarkets and the people. Besides,their overall functioning wouldbe subject to scrutiny by Parlia-ment on a yearly basis and theirdecision could be challenged be-fore the appellate authority.

Draft Regulatory Billmay be Taken Upin Winter Session

Eye on Regulators

How it will help

Government has very high dependence on private players for infra development

Private players wary of investing due to lack of transparency, accountability

Power, oil & gas, telecom, roads, ports and airports will benefi t

GOVT REVIVING THE DRAFT REGULATORY REFORMS BILL, 2013

Regulators should be appointedvia fair, transparent process

Accountable to Parliament

Parliament should scrutinisetheir functioning annually

Decisions of regulator could be legally challenged

What it proposes

NEW DELHI The Centre may comeup with an integrated plan tocombat inflation in farm pro-duce with measures to enhanceshelf life and prevent wastage offood at the national level.Rural development minister Ni-tin Gadkari is scheduled to chaira high-level inter-ministerialmeeting in this regard onWednesday to review the use ofradiation technology for preser-vation of perishable food andagriculture commodities, simi-lar to what is being done in Mah-arashtra.At the meeting, officials fromthe Bhabha Atomic ResearchCentre (BARC) will present be-fore a group of seven ministers ablueprint of a comprehensiveplan to be implemented acrossthe country for a sustainable so-lution devised to curb increasein prices of agriculture commod-ities.More than 10,000 farmers inMaharashtra have benefitedfrom radiation technology usedfor onions under the guidanceand assistance of BARC.According to Gadkari, the idea isto suggest application of themodel at the national level for allagricultural produce for the ben-efit of the farming community.The government feels that theradioactive technology will notonly help enhance shelf life offood but also provide a valueproposition for farmers and con-sumers alike.Although food inflation fell to7.97% in June from 9.56% in May,compared with the previousyear, it is still high and with mon-soon still being suboptimal,there is a possibility of furtherrise in prices of agricultural com-modities. —Our Bureau

Centre Plans toFollow MaharashtraModel to CombatFood Inflation

Product: ETNEWMumbaiBS PubDate: 23-07-2014 Zone: MumbaiCity Edition: 1 Page: ETMCPG17 User: sandeepd0203 Time: 07-22-2014 23:17 Color: CMYK