Mukherjee confident of approval of key financial reforms in 2012

Finance minister Pranab Mukherjee has expressed confidence that lawmakers would approve key financial sector reforms this year, despite concerns any meaningful bills would be delayed until a new government took office in 2014, due to a political deadlock.

According to Mukherjee, who was speaking in an interview on Saturday night, said India's reforms were a "continuing process" which was following its natural course through different instances of government.

"It is not that there is any stoppage of the reforms," he told Reuters in Washington, following a meeting of the International Monetary Fund and the World Bank.

He said the reforms process was going on and he hoped that three important legislations - the pension funds and regulation amendment act, the insurance amendment act and the banking amendment act - are likely to be passed either in the current session of parliament or in the next session of parliament.

The IMF last week urged India to implement economic reforms to address growth constraints, which according to the fund would slow to around 7 per cent in 2012 from a level of 8.4 per cent maintained over the past two years (See: IMF urges India to keep policy rates on hold). 

Concerns over a political impasse in the country rose in the past few days following a top economic adviser for the government saying no big reforms would be possible before the 2014 elections, though he later said his comments had been taken out of context.

"I think some statements of the chief economic adviser created some confusion but he himself has ratified that," Mukherjee said.

According to the finance minister, India only needed to get cabinet approval before announcing how much it intended to contribute to boost IMF firepower.