PM chides industry, outlines fresh reforms agenda

By Our Special Correspondent

NEW DELHI, DEC. 16. Seeking to set aside the ``unnecessary political controversy'' of the past week, the Prime Minister, Mr. Atal Behari Vajpayee, today outlined a fresh agenda for reforms with the focus on power, railways, cutting government spending and revising labour laws. Simultaneously, he chided the domestic industry urging it to set its own house in order before seeking more concessions.

Addressing the annual general meeting of the Federation of Chambers of Commerce and Industry (FICCI), Mr. Vajpayee said it was time to focus on the most important agenda of the nation, - ``faster, more balanced and more equitable development''.

Stressing the Government's political will to carry forward reforms, the Prime Minister confessed he was ``disheartened'' that implementation continued with ``the same old mindset''. The four different governments of the last decade had all been disappointed at the slow pace of decisions getting translated into actions. If this experience had taught any one lesson, it was that reform of the implementation system must be made an integral part of the reforms process.

Pointing to the need to cut down non-productive government expenditure, he admitted that little had been done to actually reduce its size despite general agreement on the issue. There was also a need for a time-table to reduce staff by 10 per cent by 2004 and for evolving a voluntary retirement scheme as in the public sector.

The Government was aware of the enormity of the task, he said adding ``we have begun to address this imperative''. The recently set up Strategic Management Group had begun work in right earnest.

Difficult phase

The Prime Minister said, ``the next and more difficult phase of reforms'', included the removal of all remaining bottlenecks to the faster growth of infrastructure. In the power sector, a special meeting of Chief Ministers was proposed to be convened to finalise an agreed programme for power reforms. ``Civil aviation too will see some important reforms in the coming months,'' he said and promised that problems of the telecom sector were being looked into. On the revision of labour laws, he argued that these were actually anti-labour as they inhibited the growth of new employment. All those concerned should give it serious thought keeping in mind the interests of the nation as a whole and not of any section.

Regarding the need for ``urgent reforms'' in the Railways, he said the management needed radical restructuring to separate rail operations from planning and policy-making. Investible funds also must be raised through innovative and commercially-oriented methods. The Government would implement the Rakesh Mohan committee's recommendations as soon as they were submitted.

Calling upon the captains of industry to do ``a lot of soul- searching'', Mr. Vajpayee did not mince words while noting that many manufacturing industries had not significantly improved production processes to make quality products at affordable prices. ``This should change,'' he said evidently referring to their pleas for anti-dumping duties on cheaper imports.

Similarly, barring pharmaceuticals, few companies invested four to five per cent of revenue on research and development to create world-class products and processes. ``This too should change.''

Mr. Vajpayee also expressed dismay over the misuse of funds from shareholders, banks and financial institutions by some companies and called for high standards of transparency, disclosure and corporate governance.

Earlier, the FICCI president, Mr. G.P. Goenka, pleaded for a level-playing field while noting that manufacturers were not as happy as consumers with globalisation. If production did not balance consumption, the effects on the country would be reminiscent of colonial exploitation with surpluses flowing out without sufficient profit inflow.

RBI rules out rate cut

PTI reports:

Speaking on the occasion, the Reserve Bank of India Governor, Dr. Bimal Jalan, agreed with the Prime Minister that cost of borrowing was high but ruled out a cut in rates this fiscal year.

``The interest rate environment was positive and it is expected to remain so,'' he said.

Allaying fears of any difficulty in the monetary situation, Dr. Jalan said the liquidity situation was ``comfortable'' with the government borrowing programme ``doing well''.

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