Southern States - Tamil Nadu

Industrial policy to focus on IT

By Our Special Correspondent

CHENNAI April 6. The new industrial policy to be released ``very soon'' by the State Government will seek to strengthen sectors in which the State enjoys a ``distinct comparative advantage,'' the Chief Minister, Jayalalithaa, said here today.

Giving a ``broad outline'' of the policy, Ms. Jayalalithaa said these sectors included engineering, textiles and leather. The policy would also aim at boosting biotechnology and information technology, radically improving the physical infrastructure, basic amenities in rural and urban areas, expanding research and development, strengthening the linkages between academic experts and business and improving skill formation and basic literacy.

The Chief Minister, who was inaugurating the annual session of the Confederation of Indian Industry-Southern Region CII-SR) devoted to the theme ``India in the era of globalisation'', said the Government would also streamline administrative regulations and processes. It was keen on having more foreign direct investment (FDI) in horticulture, IT and IT-enabled services, basic engineering, textiles and leather, among others.

She said the results from economic liberalisation and integration with the global economy, undertaken by India in the past decade, had not been as expected. However, unmindful of several constraints, her Government was determined to ensure that the State became the number 1 in the country in terms of human development indicators.

The budget for 2002-03 incorporated the Government's vision.

When her Government assumed power in May 2001, it had inherited a negative balance of Rs. 2,500 crores from the previous DMK government.

``I discovered that I had only two options — either we remained a mute witness to the fiscal paralysis that had taken over the Government or we resolved to take necessary tough decisions to find a solution to the problem. Naturally, I chose the second option'', she said.

She said the White Paper on Government finances tabled in the legislature last year ``was discussed threadbare by the political parties'' and legislators expressed ``serious concern over the quagmire the State had been allowed to sink into''.

The current budget, with its emphasis on wasteland reclamation, rainwater harvesting, rural infrastructure, etc., aimed at creating employment and purchasing power in the hands of the people.

Road policy coming

Indicating that a road policy was also in the offing, the Chief Minister said a video conference on investment in the IT and biotechnology sectors, being organised jointly with the Indo-American Chamber of Commerce on April 29 was part of Government's efforts to market the State, which already was a prime destination for foreign investment.

S. Mahalingam, chairman, CII-SR, suggested reconsideration of the levy of entry tax in the budget. The Secretary (Revenue) to the Union Government, S. Narayan, said the indirect and direct tax concessions to the tune of Rs. 16,000 crores given by the Central budget for the current year, besides tax refunds of Rs. 5,700 crores, had not led to any revival of demand. Still, the Government had retained all those concessions, and gone in for a ``small tax burden'' to part finance additional Plan outlays of Rs. 16,000 crores. It had also relaxed FDI and external commercial borrowing norms, and it was now for the industry to perform its role.

Pankaj Ghemawat, Harvard University's School of Business Administration, said the lead enjoyed by southern States over the rest of the country in terms of factor costs including capital, power and import delays was only marginal. The Chief Minister inaugurated work on a new building for the CII-SR office at Guindy.

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