PM promises industry leaders meet on economic reforms in Aug

July 25th, 2008 - 8:04 pm ICT by IANS  

A file-photo of Manmohan Singh

New Delhi, July 25 (IANS) Prime Minister Manmohan Singh will meet industry leaders early next month to discuss the issue of economic reforms, the chief of a leading industry chamber said here Friday. The meeting, most likely to be held soon after the prime minister’s return from the Saarc summit in Colombo in August, will take up various demands of the industry to further push forward economic reforms.

“Prime Minister Manmohan Singh has assured to meet us some time next month to discuss the issues the industry has been persistently raising for some time,” Rajeev Chandrasekhar, president of the Federation of Indian Chambers of Commerce and Industry (Ficci), said Friday.

Chandrasekhar, while admitting that increasing interest rates was a matter of concern for the industry, said: “The current inflation is caused by very pronounced supply-demand mismatch.”

“Monetary measures are not a good short or medium term solution to inflation,” he told reporters after submitting a 100-day agenda for the government to accelerate economic reforms.

Said Amit Mitra, secretary general, Ficci: “There is a disconnect between the hike in interest rates and inflation. It is high time the government ensured that we do not drive off the cliff.”

Chandrasekhar, also a member of the Rajya Sabha, said the government needed to re-ignite confidence in the economy for a double-digit growth after Prime Minister Manmohan Singh won the trust vote Tuesday.

The thrust areas of Ficci’s agenda were: stimulate investment across the economy, enhance efficiency and competitiveness of the Indian economy by targeting reduction in transaction costs, set new standards in governance, and address the perception of a looming fiscal crisis.

“The expansion of the Indian economy over the last four years has been on the back of increasing investment flows and rising investment to gross domestic product (GDP) ratio,” said Chandrasekhar.

The agenda lists out measures to boost investments in infrastructure, stabilise the policy framework for special economic zones (SEZs), and finalize a comprehensive demand moderation strategy based on market forces and incentive/disincentive structure.

Ficci has also sought industry status for the retail sector, and permission for companies to set up higher educational institutions to plough back surpluses for development and expansion.

“The government should open up the defence and homeland security industry to the private sector to leverage the capabilities of industry for achieving the long-term goal of indigenising India’s defence imports,” he said.

He called for measures to push investments in telecom by expediting the announcement of a world-class 3G policy and auction guidelines which would allow an open, global and transparent auction process consistent with international best practices.

Associated Chambers of Commerce and Industry (Assocham), another industry lobby, submitted Thursday a seven-point agenda to Prime Minister Manmohan Singh, and sought expeditious reforms in sectors like agriculture, civil aviation and insurance.

Agreed Chandrasekhar: ” It is critical to ensure investment formation in agriculture so that the entire agriculture economy is transformed from a largesse-driven sector to an internationally competitive sector where Indian farmers and agri-businesses can become the food suppliers to the consumers of the world.”

He said that private sector investment in agri-infrastructure should be eligible for 150 percent weighted deduction as was the case with investment in research and development (R&D).

Chandrasekhar said most of the issues raised in the agenda were doable within a period of three months, and hoped the government would act earnestly towards that direction.

“There are no reasons for the government to say that they cannot do all this in the national interest,” Chandrasekhar said.

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