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`Invest in R&D or pack up'

Our Bureau

NEW DELHI, Sept. 26

TRANSPARENCY in functioning and adopting corporate governance will be the key mantras for Indian corporates to raise capital in the country and abroad, according to Mr Rahul Bajaj, Chairman and Managing Director of Bajaj Auto Ltd.

In the newly emerging industrial environment, corporates should learn to trust and empower young people. In fact, ``we need to get used to CEOs in the age group of 25-40,'' Mr Bajaj, a former President of the Confederation of Indian Industry (CII), sai d.

Mr Bajaj advocated internal liberalisation as a positive step towards attracting greater foreign direct investment (FDI). Though India is a more open economy than China, it has been able to attract a meagre $3 billion FDI compared to the latter's $35-40 billion.

``By internal liberalisation, I mean liberalisation in the areas of labour, cost of capital, infrastructure and privatisation. Similarly, there is a need to reduce fiscal deficit, red-tape and corruption,'' Mr Bajaj said while delivering the lecture at t he 14th Foundation Day of the Council of Scientific and Industrial Research (CSIR), on Tuesday.

He felt that there were a few Indian companies in many sectors of the economy, which, if managed efficiently and provided with the necessary internal liberalisation, could successfully compete against global competition.

The reality, however was, even today, no Indian company was global in size or internationally competitive.

``After a decade of liberalisation, the only things we can export in volume are gems and jewellery, garments and software. As a percentage of world trade, our export of software remains less than one per cent,'' Mr Bajaj said.

With competent people becoming more scarce and attracting and retaining people a big challenge, the domestic industry was in for a tough time, he remarked.

The Bajaj chief said the domestic industry would have to invest adequately in research and development (R&D) or face the prospect of packing up or be taken over. The current spending on R&D, which is 0.8 per cent of the GDP and of which industry's contri bution is just around 20 per cent, was niggardly, he observed.

Earlier, the Union Minister for Science and Technology, Dr Murli Manohar Joshi, announced 25 new fellowships, each of Rs 15,000 per month to young researchers in memory of Dr Shyama Prasad Mookerji, the first Vice-President of CSIR and whose birth centen ary is being celebrated this year.

The Director-General of the CSIR, Dr R.A. Mashelkar, said the prize money for the prestigious Shanti Swarup Bhatnagar awards would be doubled to Rs 2 lakhs from the year 2000. The names of 10 winners for the year 2000 were also announced on the occasion.

Pic.: The Union Minister for Science and Technology, Mr Murli Manohar Joshi, with the Chairman and Managing Director of Bajaj Auto, Mr Rahul Bajaj, at the CSIR Foundation Day in the Capital on Tuesday.

Picture by Kamal Narang