Cautioning that absence of economic reforms will slow down growth, Indian finance minister P Chidambaram on Monday said political parties may oppose but should not obstruct decision making.

"Every government is entitled to lay down policies. Opposition to policies is legitimate, obstructionism is not," Chidambaram said while addressing the annual Economic Editors' Conference.

"The government of the day must be allowed to lay down policies, pass legislations wherever necessary, and get on with the job of implementing those policies," he added.

Noting that these were challenging times, the minister said, "Without reforms, we risk a sharp and continuing slowdown of the economy which we cannot afford given the imperative need to generate jobs and incomes for a large population, most of whom are young."

India's economic growth during 2011-12 slipped to nine- year low of 6.5 per cent and during the first quarter of the current fiscal it was 5.5 per cent.

Expressing confidence that with requisite savings and investments India's economic growth rate will recover to 8 per cent and more, and perhaps touch 9 per cent, the minister said, "We should keep that rate of growth as our objective and progress towards achieving that objective."

Indian government recently took host of reform initiatives but steps like hiking FDI cap in insurance and pension to 49 per cent would require legislative changes, which would not be possible without the support of main opposition party Bharatiya Janata Party.

"Long standing structural reforms required to achieve high investment and high growth rates have been held back because of many reasons. Among them are...the need to forge a consensus on reforms, the practical necessity to garner support across the political spectrum to pass legislation... Nevertheless we are now addressing the difficult areas of reforms," he added.

Referring to the government decision to allow FDI in multi-brand retail, Chidambaram said, "We must not fear foreign investments in India. We have the sovereign right to decide where and how foreign investments would be allowed into India."

The decisions to allow foreign investment should not be tested on the basis of undefined ideology or theory, but on a clear-headed assessment of the advantages that would accrue to India, he said.

"I have no doubt...FDI in retail, aviation and FM radio broadcasting are decisions that will benefit the economy and the country," he added.

Chidambaram also underlined the need for containing inflation and said that appreciating value of the rupee would help in brining down the cost of imported crude, petroleum products and fertilisers.

"The value of rupee is an important factor that effects the value of imports. A depreciating rupee will also impact trade and investment. Hence, the need to stabilise the exchange rate. I believe that we have met with moderate success," the minister said.

The rupee, which touched 57.22 to a dollar on June 27, 2012, has gradually appreciated to 52.13.

The other important task before the government was to contain fiscal deficit, he said, adding, "no one will have confidence in the Indian economy if there is uncertainty about the fiscal stability of the country".

As regards the Kelkar Committee on fiscal consolidation, the minister said that it has presented the worst-case scenario and it was the duty of the government to take steps to avoid that and "do every thing possible to contain deficits".

The government, Chidambaram added, will shortly announce a fiscal consolidation programme based on the feedback on the Kelkar Committee report.

Ruling out any probe into business dealings between Sonia Gandhi's son-in-law Robert Vadra and realty major DLF, Chidambaram said the government cannot look into private transactions unless there are specific allegations of corruption.

"...unless there is a specific allegation of quid pro quo or corruption, I am afraid private transactions cannot and ought not to be allowed to be questioned on the basis of imputations and insinuations", he said.

Civil rights activist Arvind Kejriwal had demanded an inquiry into business dealings between Vadra and his companies and real estate giant DLF.

Kejriwal had alleged that DLF gave interest free loan of Rs 65 crore to Vadra. The company as well as Vadra had denied the allegations.

Chidambaram said he "could not respond (on the issue) on behalf of the government because that is not the issue here. I think those who made their allegations have made their statement, the company concerned has made a statement and the individual concerned has made a statement".

Vadra had earlier dismissed Kejriwal's allegations as "utterly false and defamatory" saying that his business transactions were "fully reflected" in financial statements before government authorities in compliance with the law.

DLF too had rejected the allegations that it had given unsecured loans to Vadra as a 'quid pro quo' for favours and said it had transparent dealing with him as an individual entrepreneur.

Kejriwal had alleged that besides an interest free loan of Rs 65 crore, DLF gave properties worth Rs 300 crore to Vadra at throwaway prices.

Insurance sector needs $5-6 bn in immediate future: FM

Making a strong case for raising FDI cap in insurance sector, finance minister P Chidambaram today said the industry requires USD 5-6 billion capital in the immediate run.

"Every company already has 26 per cent FDI. So if you raise the cap from 26 per cent to 49 per cent, then there is a headroom for them to bring in more capital. The estimated capital requirement in insurance sector is about USD 5-6 billion in the immediate future," the minister told reporters.

The penetration ratio in life insurance sector is 4.4 per cent and 0.76 per cent in the non-life segment, meaning a vast majority of the population does not have insurance at all.

While the Cabinet last week approved an amendment to the Insurance Laws (Amendment) Bill, 2008, to raise the foreign direct investment (FDI) in the sector from 26 per cent to 49 per cent, the proposal needs to be cleared by Parliament.

Chidambaram said the government intends to meet BJP and other parties ahead of the Winter Session to seek their support to raise the FDI cap to 49 per cent from the present 26 per cent as the sector require huge amount of capital.

He said "by and large" the provisions of the insurance bill are along the lines recommended by the Standing Committee for Finance and he does not expect any opposition to the entire bill or the most of its clauses.

"The disagreement is only...to only one clause (related with FDI ceiling). On that clause, I expect a vigorous debate and I hope I will be able to convince the opposition parties. Even before the Parliament session, I intend to meet with the Principal Opposition party and other parties and ask for their support," the finance minister said.

The Standing Committee headed by senior BJP leader Yashwant Sinha had recommended to maintain the FDI ceiling at 26 per cent in the sector.

Increasing the FDI ceiling is a long standing demand of the industry and the sectoral regulator IRDA.

At present there are 23 private sector life and non-life insurance companies, besides state-owned LIC, GIC and four general insurance companies.

The state-run insurance companies will remain in the public sector.

The Insurance sector was opened up for private sector in 2000 after the enactment of the Insurance Regulatory and Development Authority Act, 1999 (IRDA Act, 1999).

FM to meet Modi on October 22 to clear GST passage

finance minister P Chidambaram today exuded confidence that the centre will be able to sort out the issues concerning implementation of the Goods and Services Tax (GST) shortly.

"I will meet with Sushil Modi, the chairman of the Empowered Committee of State finance minister's on October 22...thereafter I have asked a meeting with the entire Empowered Committee, and I am confident that with these two meetings and perhaps one more meeting if necessary, we will be able to resolve all the issues concerning GST," Chidambaram told a conference of economic editors.

"And once the state finance ministers are on board and all of us have agreed on what needs to be done, then passage of the GST Bill in Parliament should be easy," Chidambaram added.

GST, which will empower the Centre and states to simultaneously tax supply of goods and services, was to be introduced from April 2010 and has missed several deadlines.

Issues related to GST network (GSTN) and matter of further Central Sales Tax (CST) are cause of delay in the implementation of the GST.

Moreover, states are also raising issues relating to dispute settlement mechanism and exclusion of certain products from the GST system.

The CST is collected by the Centre and distributed among states. As a pre-cursor to GST, Centre and States in April, 2007, had agreed to phase out CST over a period of three years and in line CST rate was reduced to 3 per cent and then to 2 per cent. The Centre had already compensated states for losses up to 2010-11.

As the Centre refused to go on compensating the states for delay in implementation of GST, states had argued that when it was decided to phase out CST, it was presumed GST would be implemented from April, 2010.

Recently, Modi had sought Prime minister Manmohan Singh's intervention to resolve the compensation issue.

States have also suggested that they should be allowed to restore the CST rate to four per cent in case the central government was not able to pay any further compensation.

A Constitution Amendment Bill on GST was introduced in Lok Sabha in March last year.

Earlier in August, Chidambaram had hoped that the Constitutional Amendment Bill to implement the Goods and Services Tax regime (GST) will be passed by March 2013.