After regaining his position as the Finance Minister of India, P. Chidambaram has given fresh impetus to economic reforms by introducing a new and improved version of the Sick Industrial Companies Act (SICA). Introduced on the last day of the current session of the Lok Sabha, the new Bill takes a completely new look at industrial sickness.

Under the new Act, the Board of Industrial and Financial Restructuring (BIFR) will lose its judicial powers and operate only as a mediator between the sick company and its creditors to help solve its financial crisis. The BIFR will have the powers to undertake an outright sale of the company if the attempts to revive it fail.

The conditions under which a company can be referred to the BIFR has been changed as well. Under the mandatory reference, a company will be registered with the BIFR within 60 days of the finalisation of its audited accounts in case its net worth halved during preceding four years.

To ensure that the revival package is offered to the company in time, the Bill has introduced deadlines. The appellate authority of the Industrial and Financial Restructuring has been abolished and the companies which disagree with the BIFR package will have to approach the high court.

Of equal importance is the way sickness has been redefined to ensure that companies which are on the way to getting sick are detected early enough. Under the new definition, a company will be treated as sick if it fails to honour debt commitments for four quarters in two years.

The Bill will now be discussed by the Parliamentary Standing Committee on Finance. Once the committee clears the Bill, it may just become an Act in the monsoon session, if the MPs do not raise any serious objection to it.

Slow and slower

They move slowly, but things do move in India. The Parliamentary Standing Committee on Finance gave its assent to the Insurance Regulatory Authority (IRA) Bill which is under consideration of the Lok Sabha. This has been described as a small yet important step towards insurance sector reforms. The problem is that reforms in this sector are taking place in only small (though significant) steps. While nobody in the industry or even the Government is happy with the pace of change, they continue to feel grateful for every step forward. The Bill is expected to be passed in the monsoon session of Parliament.

The actual infusion of competition in this sector requires another set of small but important steps. These include amendments to the GIC and LIC Acts which will end their monopoly status and clarifications on the exact powers of the IRA. Much needs to be done, but it seems unlikely that the pace of change will change.

India on tap

Even as foreign multinationals are busy planting their roots in India, a clutch of Indian entrepreneurs are establishing and increasing their presence in Western markets.

A New York Times report says that liquor baron Vijay Mallya is entering the United States speciality beer market with his home-grown brands. He is buying small manufacturers and creating a countrywide network to produce and sell beer. In the first phase Mallya will acquire seven micro-breweries which make 50,000 barrels of beer. The US beer market is worth $ 50 billion a year.

This is not Mallya's first foray abroad. He has practically sewn up the Indian beer market in the UK. Indian beer is very popular among Britons who like to drown the curries with it.

The Indian restaurants network in the US was the perfect launching pad for Mallya's Kingfisher label. The beer sold in the UK is brewed at Kent, and outsells all other Indian beers.