Don't make WTO the scapegoat: Manmohan

By Our Special Correspondent

THIRUVANANTHAPURAM, OCT. 20. The former Union Finance Minister, Dr. Manmohan Singh, today said the WTO should not be blamed for all the problems being faced by States like Kerala.

Dr. Singh, who is in the State on a request from the Antony Government to lend his guidance in correcting the aberrations in the State's economy, told a press conference that the real problem was the disinclination on the part of the Union Government to lift the bound rates of agricultural commodities to the levels permissible under the WTO.

"They did not take timely action (in this area) due to some compulsion or the other" Dr. Singh said.

Referring to the fall in the prices of rubber, coconut and spices, which had dealt a crippling blow to the State's economy, he said that, in the long run, the State would have to produce these commodities at globally competitive prices. Commodity prices were increasingly being influenced by global factors and India could not hope to keep itself insulated from this phenomenon.

Responding to a question, he maintained that the economic reforms the Congress Government at the Centre had initiated when he was the holding charge as the Finance Minister, had definitely been in the right direction.

"When we were in power, the economy was growing at a rate of 7 per cent. Exports were growing at a rate of 20 per cent and Industry, between 12 and 13 per cent" he said, dismissing the criticism of the leftist parties in the State against Dr. Singh's reforms.

"Subsequently, there has been a slowdown. But it would not have happened if the Governments which had come to power at the Centre later on had pursued the economic reforms efficiently" he said.

Dr. Singh said he would not envy the Antony Government. It had a formidable job in its hands, rectifying the damage done to the economy of the State by the Nayanar Government's shoddy financial management. The committed expenditure of the State Government had been taken to dizzy heights by the previous Government. And it had been borrowing left and right to meet its day to day expenses.

He said the per capita debt of the State was the highest among the southern States now. Since 1996, revenue growth had been declining drastically, while the expenditure had been shooting up in geometrical proportions. "But I am confident that the Antony Government could reverse the trend within a reasonable time through tighter financial management" he said.

He said that, during his discussions with the Chief Minister, the Finance Minister and top Government officials here, he had proposed the setting up of a project preparation facility in the State to help the flow of more investments into the State.

The woefully low credit-deposit (CD) ratio of the nationalised banks in the State was but a symbol of the sluggish character of the flow of investments into the State. The CD ratio now stood at around 45 per cent here, while it was 80 per cent or more in the other southern States. Dr. Singh said there should be no problem for bankable projects even in public sector or joint sector receiving support from the financial institutions.

Referring to the Chief Minister's hopes of ensuring Rs. 50,000 crores of investments in the State in the next five years, Dr. Singh said: "We should always aim high. I am sure that the Antony Government can achieve this with a new sense of vision, backed by a credible action plan" he said.

He said the crisis through which the State was passing through at the present moment should also be considered as a big opportunity. "There is much inertia in Kerala, which is a State with tremendous potential. The present crisis should bring a sense of urgency. This could well be the beginning of a new chapter for the State" he said.

Dr. Singh said Kerala had a good brand name outside as a State with high achievements in social sectors. Unfortunately, it also had a bad reputation, due to some reason or the other, in the matter of investment climate. The factors which had cultivated this impression needed to be tackled to set the State on the path of progress, he said.

The Chief Minister, Mr. A. K. Antony, and the Finance Minister, Mr. K. Sankaranarayanan, too were present at the press conference.

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