Opening up retail sector to create over 10 m jobs: Sharma

The Hindu Businessline - New Delhi, Nov 25: 

The Centre on Friday said that its decision to further liberalise retail trade will in turn help in generating around 10 million jobs in the next three years. The move will also help attract several big-ticket investments worth “billions of dollars”, it said.

The Union Cabinet had on Thursday permitted 51 per cent foreign direct investment (FDI) in multi-brand retail trade with Government approval and 100 per cent FDI in single brand retail. The existing policy had prohibited FDI in multi-brand retail and allowed only 51 per cent FDI in single brand retail.

The Centre will issue a Press Note next week to lay down the guidelines of the policy on FDI in single-brand and multi-brand retail.

It expects fresh investment proposals in the retail trade soon after that and these proposals will then be considered by the Foreign Investment Promotion Board. After that, the companies will have to approach the States for the requisite licences to begin operations.

“In the next three years, over 4 million jobs will be created in the front-end, while the logistics side of the retail trade will generate around 5-6 million jobs,” the Commerce, Industry and Textiles Minister, Mr Anand Sharma, told reporters. The jobs will be created in the agro and food processing industries, packaging, bottling, canning, containerising, as well as transport sectors.

On the reason for liberalising the FDI policy on retail trade, Mr Sharma said, “Unless and until this is done (liberalise retail trade), we will have a situation where the farmer bleeds and the consumer is fleeced.” The new policy will result in better returns for farmers, cheaper options for consumers as well as help attract the latest technology in retail infrastructure, in cold chain and in value-addition, he said.

‘PREDATORY PRICING’

Mr Sharma also denied that allowing more FDI in the retail trade would result in big players resorting to predatory pricing to push out small stores. In this regard, he said the country has a strong Competition Commission of India (CCI), adding that discussions are on “at the highest level” to further strengthen CCI.

‘ONLINE RETAIL TRADE’

Asked how the condition of allowing retail sales locations to be set up only in cities with a population of over 10 lakh as per 2011 Census will be applicable at a time when more people are buying and selling using internet, Mr Sharma said the Industry Ministry will look into that aspect. However, the Minister admitted that the issue of online retail trade has not been adequately addressed by the policy.

Meanwhile, an official statement said only 53 cities qualify for FDI in multi-brand retail out of nearly 8,000 towns. “The FDI in multi-brand retail is being opened in 53 cities only with population of 1 million and for the rest of the country, current policy regime will apply,” it said, adding that cities may cover an area of 10 km around the municipal/urban agglomeration limits of such cities.

JOB CREATION

The official statement said: “Industry estimates suggest employment of one person per 350-400 sq.ft of retail space, about 1.5 million jobs will be created in the front-end alone in the next 5 years.

“Assuming that 10 per cent more people are required for the back-end, the direct employment generated by the organised retail sector in India over the coming 5 years will be close to 1.7 million jobs. Indirect employment generated on the supply chain to feed this retail business will add millions of jobs,” it added.

MINIMUM INVESTMENT

Mr Sharma said minimum amount to be brought in as FDI by the foreign investor would be $100 million. The Minister added that at least 50 per cent of total FDI brought in shall be invested in 'backend infrastructure'.

‘Back-end infrastructure’ will include capital expenditure on all activities, excluding that on front-end units, the statement said. For instance, back-end infrastructure will include investment made towards processing, manufacturing, distribution, design improvement, quality control, packaging, logistics, storage, warehouse and agriculture market produce infrastructure. Significantly, expenditure on land cost and rentals, if any, will not be counted for purposes of backend infrastructure, it added.

SOURCING FROM SMALL INDUSTRY

The policy also mandates that at least 30 per cent of the procurement of manufactured/ processed products shall be sourced from 'micro and small industries’ which have a total investment in plant and machinery not exceeding $1 million. Mr Sharma said the new policy will also result in increased sourcing of products from India.

According to the policy, 30 per cent sourcing is to be done from micro and small enterprises which can be done from anywhere in the world and is not India specific. This is to make it compliant with the World Trade Organisation norms.

This condition is to ensure that India’s SME sector, including artisans, craftsman, handicraft and cottage industry benefits, especially in sectors like textiles, gems and jewellery, leather and jute, the statement said. “This condition is applicable for multi-brand retail in all cases and for single brand retail in cases where foreign equity exceeds 51 per cent,” it added.

ENHANCING FDI CAP IN SINGLE BRAND

On the rationale for enhancing FDI ceiling to 100 per cent in single brand retail trading, the statement said, "In the last 5 years, under the current regime of 51 per cent FDI in single brand retail, FDI of only $44.45 million have been received, constituting barely 0.03 per cent of total FDI inflows."

"Globally, single brand retail follow a business model of 100 per cent ownership and global majors have been reluctant to establish their presence in a restrictive policy environment. The current cap of 51 per cent confers a right to pass all ordinary resolutions, while enhancing cap to 100 per cent will confer full ownership and control," it said.

Mr Sharma also referred to the retail policy in countries such as China, Thailand, Russia, Indonesia, Brazil, Argentina, Singapore and Chile where 100 per cent FDI is permitted in the sector and added that the retail and wholesale trade as well as agro-processing sector have posted impressive growth in those countries. He said, therefore, the new policy would not adversely impact small retailers in India.

Fertilisers set to turn dearer on rupee's slide

The Hindu Businessline New Delhi, Nov. 22: 

Even as planting for the current rabi season gets underway, farmers are in for a tough time on the fertiliser front. The reason: A weakening rupee that has made imported fertilisers costlier and companies passing these on to them.

The maximum retail price (MRP, net of local taxes) of di-ammonium phosphate (DAP) ruled at around Rs 11,000 a tonne at the start of this year's kharif season, which rose to Rs 14,000 towards the end. For the ongoing rabi season, companies started off by raising the price further to Rs 18,200 a tonne.

“Those hikes were only a result of global prices going up over the last few months. It doesn't take into account the rupee's depreciation, which is much more recent. To offset that, we may have to hike the MRPs further to Rs 20,000 or more”, said an official from a leading private phosphatic and complex nutrients company.

The same holds for muriate of potash (MOP), which was priced at Rs 6,300 a tonne at the start of this kharif and then raised to Rs 9,000 mid-way through the season. For the current rabi, companies announced a rate of around Rs 11,300, which, they now say, will have to be revised still upwards to Rs 12,600 or so in the light of the rupee's recent slide. The rupee has weakened by 18.5 per cent against the dollar till date since April this year.

No hike: Iffco

The country's largest fertiliser seller – Indian Farmers' Fertiliser Cooperative (Iffco) – has, however, indicated that it will not raise prices further now. “We have begun negotiations with our suppliers seeking discounts on the contracted prices to tide over the situation as we don't want to pass on the burden to farmers,” said Dr U.S. Awasthi, Managing Director of Iffco.

The co-operative, which imports fertilisers from about 10 suppliers located in the US, Russia, Japan, Morocco, Israel and Jordan, has sought a discount of $50 or 7.3 per cent on its originally contracted price of $677 a tonne (cost & freight, India) for DAP. A similar discount of $45 a tonne is being sought on complex fertilisers that contain various proportions of nitrogen (N), phosphorous (P) and potash (K).

“It is an unprecedented situation. I hope our suppliers understand this and support us or else we may have to invoke force majeure clause, cut imports and shut down our units,” Dr Awasthi told Business Line.

Costlier DAP, MOP and complexes on account of increase in global prices as well as a weak rupee have also created a piquant situation vis-à-vis urea, the MRP of which continues to be regulated by the Centre. Since the decontrol of all non-urea fertilisers since March 2010, the MRP of DAP has almost doubled (from a level of Rs 9,350 a tonne), while almost trebling for MOP (from Rs 4,455 a tonne). On the other hand, urea prices have risen by just 11 per cent, from Rs 4,830 to Rs 5,364.69 a tonne.

The disproportionate price increases have led to a sharp dip in DAP and MOP sales, even while farmers are applying more urea (see Table).

Besides higher urea sales, companies have also sought to maximise production of complexes that contain less P and K compared with high analysis fertilisers such as DAP and MOP. Thus, instead of selling DAP or MOP directly, they have been trying to push more complexes such as 12:32:16:0, 20:20:0:0 or 14:28:14:0 that contain less of these nutrients.

vishwa@thehindu.co.in

Nabard sanctions Rs 717 cr for crop loan refinance in AP

The Hindu Businessline - Hyderabad, Nov. 22: 

Drought-hit farmers in Andhra Pradesh can look forward to some financial help. Nabard has sanctioned Rs 717 crore for providing refinance to co-operative banks and regional rural banks in the State.

Farmers in 555 of the nearly 1,100 mandals affected by drought need fresh credit this year. The additional allocation from Nabard is essentially for supporting seasonal agricultural operations (crop loans) by these banks.

According to a release, Rs 550 crore of the allotted funds have been earmarked for co-operative banks and Rs 167 crore for rural banks. This was in addition to the existing limits of Rs 4,200 crore, including Rs 2,600 crore for cooperative and Rs 1,600 crore for rural banks.

During last year the State could absorb Rs 3,300 crore from Nabard. There is an increase in credit demand from the farmers in the State. There was also a buoyancy in the ground level credit and banks are expecting that the credit demand will increase during the ongoing rabi season.

Of the Rs 2,600-crore allotted for the present year, co-operative banks have already refinanced up to Rs 1,762 crore from Nabard. In the case of rural banks, the figure is Rs 1,080 crore against Rs 1,600 crore.

While the banks are expected to utilise the full funds this year, Nabard was geared to consider further refinance to meet their requirements. Nabard provides crop loan refinance for production credit to cooperative banks at a rate of 4 per cent and for rural banks at 4.5 per cent a year respectively.

soma@thehindu.co.in

Seed replacement rate for paddy rise farmhands decrease

The Hindu Business Line - Mumbai, Nov. 14:

The problem of labour availability has brought in some cheer for the seeds industry, especially in South India.

“The seed replacement rate in paddy is increasing in South India in view of the labour problem,” said Dr M. Ramasami, Managing Director of Salem-based Rasi Seeds Pvt Ltd.

The replacement rate is around 95 per cent in paddy, according to him.

According to Government statistics, the seed replacement rate in Andhra Pradesh and Tamil Nadu for paddy is 82 per cent and 67 per cent respectively till 2008. The seed replacement rate is also higher in the case of maize since hybrids are being used. Even in paddy, the increased preference for hybrids is seen as the reason for the rise in seed replacement rate.

Till 2008, the all-India seed replacement rate was 25.87 for paddy, while it was marginally lower for wheat at 25.23. The seed replacement rate is higher for maize (corn) at 44.24 per cent and bajra at 48.47 per cent.

“Even in traditional varieties, farmers are going for seed replacement due to labour shortage. It needs labour to keep the seeds separate, process, dry and then store them,” Dr Ramasami said.
Economic viability

On the other hand, adoption of methods such as the system of rice intensification (SRI) in Andhra Pradesh and Tamil Nadu is also helping.

“Earlier, farmers were asked to use 30 kg seeds on an acre. With methods such as SRI, it is enough for them to use just 5 kg. It is economically feasible for them to buy seeds now,” he said.

Rasi Seeds, as part of its efforts to improve research and development in rice, has moved its rice research station to Hyderabad from Salem in Tamil Nadu.

It has also set up research stations for vegetables in Kullu (Himachal Pradesh), Gurgaon (near New Delhi) and Bangalore (Karnataka), said Dr Ramasami, who was here to attend the fifth World Cotton Research Conference.

“We have entered the vegetable seeds market aggressively in the last three years since it offers us better scope,” he said.

Rasi Seeds is more popular for its cotton seeds but the fact that the crop is grown in only nine States has forced the company to expand its activities to other crops and horticulture. The company has also started marketing maize seeds for the last three years.

On cotton, Dr Ramasami said that his company was field-testing a variety that would grow more closely. “We are conducting field trials in the North and may commercially release it next year,” he said.

The variety, by growing closely, will help in better fertilisation, irrigation and also ease problems of picking during harvest.

Asked how much the variety would yield, he said: “It is a better yielding one.”

On mechanisation of cotton cultivation, he said breeders or seed makers would have to be given proprietary rights or seed production costs would have to be drastically lower. “It will take time for mechanisation but these things will have to happen,” he said.

Food Logistics needs to expand its network

Paddy Procurement is set to be affected

Tomato market in Maharashtra keeps commission agents at bay

 The Economic Times

 

PUNE: The farmer does not pay the commission agents nor the porters here. He decides the price of his produce and sells it directly to the trader. The open auction market for tomatoes in Narayangaon on the Pune-Nashik highway is something that every farmer wishes exists in his village.

In any market where agricultural produce is sold through commission agents, the farmer does not know the price at which a deal happens between the agent and the trader. He has to believe what the agent tells him and be happy with whatever pittance he gets paid a month later. But at the Narayangaon market, the trader or his representative comes to the farmer and quotes a price. No middlemen involved and the deal is struck. The farmer gets his money right on the spot.

"We are now saving 30% just because of doing away with the commission agents and other market-related expenses," said Prakash Wagh, a tomato farmer from village Pimpalvandi near Narayangaon who is growing the vegetable for the past 30 years.

Today, farm income has more than doubled in the region while the Junnar APMC, under which the open auction market functions as a sub-market, has succeeded in increasing its income five times in four years. "Our turnover has increased from Rs 67 lakh four years ago to Rs 3.75 crore this year," said its secretary Balasaheb Mhaskare.

The market did not come into existence as a reform measure by the government. A group of younger farmers, called the Shivneri group of agricultural graduates, literally forced the government to allow the market come into existence.

"The turnover of the tomato market has increased from Rs 3 crore in 2004 to more than Rs 100 crore last year," said Sriram Gadhave, president of the Shivneri group and the national president of the All India Vegetable Growers' Association. Gadhave took the initiative of developing the market and is making sure that it survives in the midst of middlemen-controlled markets.

Due to its specific climatic conditions, Narayangaon supplies more than 60% of tomatoes consumed in the country during the four months of the rainy season.

There is a strong demand from farmers to extend the open auction system to other crops. The Junnar APMC has started such a market on a pilot basis for bananas at Otur near Junnar.

The growing irrelevance of a MSP

 The Business Standard

The Central government’s MSP has proven to be unrealistic and ultimately disastrous for India’s farmers.

Imagine that the first of the month rolls around triggering a ritual that never fails to give you a distinct, intangible sense of well-being —logging on to your online bank account and seeing your account balance pumped up thanks to a well-deserved paycheck that’s just been deposited. Imagine the feeling in the pit of your stomach when you realise that your paycheck is a third, or maybe even half what it should be because of the vagaries of some complex pricing mechanism controlled by Human Resources. Would you come back to work? This is sort of what farmers across the length and breadth of India have been wrestling with—where the costs of cultivating their land is seldom met by the sale of foodgrain to the government (In India, the government, not private companies, are responsible for procurement) because the price—called the minimum support price (MSP)—is far below what would allow the farmer to earn a living. So grave is the situation that 40,000 farmers in East Godavari district of Andhra Pradesh recently decided to let their fields go fallow this year.

Year after year, the central government declares an MSP which neither reflects the cost of production, nor provides support to farmers. Here’s how it is calculated: First, the department of statistics within the Ministry of Agriculture collects data from about 8000 farmers across the country on a daily basis for a month in a scheme called ‘Cost of Cultivation’. This includes a arange of agricultural inputs such as labour costs, land rent charges, and seed and fertiliser costs. These are then forwarded to the Committee of Agricultural Costs and Prices (CACP), within the same ministry which evaluates the data and then makes a recommendation of an MSP for 24 different commodities to be accepted or rejected by the Cabinet.

Yet, the MSPs very rarely reflect the on-ground reality of farmers in states as a farmer in Punjab, with an average cost of male labour at Rs 250 a day, for example, will face a very different economic equation than a farmer in Maharashtra where labour is Rs 80 a day. Input costs differ dramatically across states and regions. In fact, states go through a similar exercise every year to establish a realistic MSP for their states and send it to the Centre which apparently ignores it and churns its own numbers.

To give you a sense of how far-off the Centre’s finger is, on the pulse of agricultural reality in the country, here is the cost to grow moong based on the calculations done by the Maharashtra government this year versus the Centre’s numbers.

The main inputs (per quintal) with their rupee costs in brackets range from hired human labour, male (Rs 87) and bullock labour (Rs 3459) to seed (Rs 943) and manure (Rs 475), to insurance (Rs 167) and interest on capital (Rs 297) amongst other things. Now, these along with rent and family labour, give a cost per quintal of Rs 3,482. With a 15 per cent profit it becomes Rs 4,062.

The MSP for moong dal declared by the CACP is Rs 3300 this year.

The CACP never releases the inputs it uses to derive the magical numbers each year. “The labour costs, or the land costs are never revealed,’’ says Vijay Jawandhia, of Shetkari Sanghatna of Vidarbha, an organisation for farmer rights.

Last week, the latest MSPs were announced with channa going up to Rs 2,800 while the going market rate is Rs 3,500, in addition to the commodity’s import allowed duty-free. Soya has been selling in the market at Rs 2,000 a quintal for the last four years, but priced this year by the CACP at Rs 1,600.

Another big oversight is that the CACP doesn’t factor the steep rise in certain input costs. For instance, Di ammonium phosphate (DAP), a key fertiliser used by farmers at the rate of two to three bags in an acre of wheat, has seen its price increase from Rs 450 two years ago to Rs 900 today. A bag of 50 kilos sells for Rs 1200 in the black market.

Several objections have already been raised against the MSP methodology. The Parliamentary Standing Committee on Agriculture in 2008 questioned the method of averaging the cost of production and wages in different regions, saying it was unfair. It even suggested that if costs for all 24 inputs be calculated on neutral ground at a government university campus, it would offer a better solution. The MSP, said the committee, was being created by people sitting in offices and without even going to the field.

Yet, Ashok Gulati the new chairman of CACP feels that a higher MSP can never be a solution. “Not only will it add to inflation and hurt consumers, it serves no purpose if there is no procurement,'' he says citing the example of Bihar where farmers sold paddy at 15 per cent below the MSP. “The solution lies in cash compensation to farmers where they get prices below the MSP, or where there is no procurement.'' says Gulati.

Could that be a realistic panacea ? Take for instance this year’s bonus of Rs 500 that the Government had declared to farmers who sold pulses directly to NAFED (the central procurement agency for pulses) within two months of harvest. Jawandhia says that NAFED never even showed up in Vidharbha and no one got paid.

A. Haque the former CACP chairman dismisses Gulati’s solution of a cash compensation. “It is not practical to do it. Where are the banks, and where are the accounts in the remote villages?” he asks. Haque, to his credit, implemented a steep hike in MSP in his last year as chairman. “There is no substitute to a good MSP and procurement and storage. All other talk is just hot air,’’ he says.

Haque also dismisses Gulati’s fears that higher MSP would hurt consumers. If the Government is giving rice and wheat at Rs 2 and Rs 3 a kilo does that not negate the higher MSP the farmers are paid? You don’t need an economist to understand this. Of course there is a limit to increasing MSP. But at least it should reflect the cost incurred,’’ says Haque.

Haque’s solution: Take the highest price so no one loses. He also suggests a choice between minimum wages or market wages to calculate MSP. These would automatically boost the profit margin too, he says. Another welcome move: make the CACP a statutory body as recommended by the Y K Alagh committee set up to study reforms in CACP. This was repeated by the MS Swaminathan Committee. The Government ignored both. Farmers think that this is a key solution for their communities. “The CACP should be independent and it should speak for farmers and not for consumers,” says Ajay Jakhar a farm sector activist and son of former Speaker Balram Jakhar. He can only hope that someone in government is listening.

Effects of higher farm support prices

 The Hindu Businessline
Ensuring that the farm sector remains commercially viable is an important policy goal, given India's growing requirements for food.

Another good farm harvest is expected this year, although the monsoon rains were not quite well-timed everywhere. There was untimely and excessive rainfall in several places and the impact was felt in the higher prices of fruits and vegetables. Nevertheless, a foodgrain harvest of 240 million tonnes has now been projected.

The year is set to be another procurement and storage challenge for the FCI and other agencies. With the current stock of foodgrain in the central pool at about 50 million tonnes, the task of storage and distribution will require much more innovation and efficiency to ensure that better output simply does not mean more subsidy and wastage.

With the bountiful harvest in sight, will prices oblige and lead to a decline in the inflation rate? If the increase in food prices is essentially a signal of rising demand relative to supply, then maintaining a favourable price environment for farmers is important to increase supplies.

Apart from the bountiful harvest now there is also a favourable price environment for major foodgrains. After all, the minimum support price was raised by 8 per cent for kharif rice, and by 9-10 per cent for pulses. The increase in the case of oilseeds was even greater.

Even in cotton, which has seen a technology revolution, there was an increase in MSP. The MSP for rabi crops has also now been increased significantly. In fact, the turnaround in pulses production in recent years is attributed to the price effect.

Unavoidable increase

Given the sharp increase in cost of production, the increases in minimum prices were probably unavoidable. Ensuring that the farm sector remains commercially viable is a policy goal for a populous country like ours, given the growing requirements for food.

The minimum prices are actually set subject to a variety of conditions, keeping in view the interests of producers, consumers and the government, which has to manage the financial outlays besides the commercial incentives for farmers. The generally tight international grain markets in recent times and the depreciation of the rupee would also justify favourable prices for domestic producers.

MSP is not the only instrument with which to influence production, although unfavourable prices are unlikely to boost output. The balance between price and other instruments to raise production has always been a tenuous one. If prices favourable to producers also lead to more investments, productivity improvements and therefore output, a period of rising farm prices is worth the effort.

Facilitating the subsequent changes is crucial for the success of price as an instrument to achieve output growth. The minimum support price is one instrument but it has several goals to consider. More important, it has to be combined with other policy instruments to achieve the often contradictory goals. A further complication that MSPs must contend with is the international markets. If domestic prices are systematically higher than international prices, domestic consumers are losing out on consumption. If the price scenario is the opposite, producers are losing out on income opportunities.

Impact on market prices

To the list of concerns that those setting the MSPs must be watchful of, we must now add inflation. Do the minimum support prices lead to a cost-price spiral, as the wage increases may lead to a wage cost-price spiral? In a sense, any moderation in farm prices is also subject to a moderation in the prices of farm inputs, particularly energy, fertilisers and wages.

If the increases in input prices are persistent there would indeed be stagnation in farm output and higher prices as well. The cost-price linkage can be broken more effectively if the cost-push elements are diffused and there are productivity responses.

Procurement prices are often higher than the MSP. They are more likely to have an impact on market prices and the prices received by the farmers than just the MSP. It is also the case that changes in MSP do not necessarily translate into the same percentage change in actual prices. For instance, the increase in the WPI for rice has remained at about 5 per cent or less in June-September this year.

If market prices are higher than the minimum prices, market forces have some room to operate in times of a bumper harvest. There is also the fact that effective purchase mechanisms may not be available for all farmers, who may end up selling their produce at lower prices.

The MSP is at least a signal that farm income is likely to suffer if there is no price correction. It may act as price protection to farmers where implementation is effective. But its positive impact is limited to the crops where it is available. In this sense, even when MSP does not play a significant role, as in the case of fruits, vegetables, milk, eggs, fish and meat, price increases have to be addressed by improving supplies.

(The author is Senior Research Counsellor, NCAER. The views are personal. blfeedback@thehindu.co.in)

Government brings farmers in loop to push FDI in multi-brand retail

 The Economic Times -

NEW DELHI: The government has readied a plan that will make it mandatory for foreign retailers eyeing India's multi-brand retail sector to do bulk of their sourcing from small farmers, its latest attempt to make the long-delayed reform palatable to opponents.

The commerce and industry ministry is ready with a cabinet note that suggests allowing 51% foreign direct investment in multi-brand retail and has provisions that require potential entrants to source at least 60% of farm produce from small farmers having land holdings of less than 10 hectares, officials with knowledge of the note's contents said.

The note also includes another provision that will ential multi-brand retailers sourcing 30% of their supplies from small and medium enterprises anywhere in the world, they added. The cabinet note is ready and is awaiting clearances from the highest level, an industry ministry official said.

Of late, FDI in multi-brand retail has become a test case of the UPA government's commitment to push pending economic reforms and revive flagging sentiment.

Indian rules now allow 51% FDI in single-brand retail and 100% in wholesale cash and carry operations. Multinational retailers have for long been lobbying for entry into India's $400-billion and fast expanding retail market, but foreign investment in multi-brand retail has for years been a political hot potato, with elements within the ruling coalition, the Left parties and the BJP opposed to it because they believe organised retailers will kill small shopkeepers and traders.

Policymakers in the government are keen to allow FDI in multi-brand retail as they believe this is one reform that could bring modern technology in much-needed back-end infrastructure and help farmers get better remuneration for their produce. The idea received strong backing at a recent meeting of key government economists called by Prime Minister Manmohan Singh.

Officials and some ministers also believe that allowing FDI in multi-brand retail is one reform that could be implemented without much difficulty as it does not need parliamentary approval, unlike the proposal to lift the cap on foreign holdings in insurance companies to 49% from 26%, which needs to be cleared by Parliament.