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Friday, Feb 08, 2002

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Chambers for more reforms

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WELCOMING the slew of measures announced by the Government on Tuesday, like offering of VRS to Government employees, decontrol of sugar, pruning of items covered by the Essential Commodities Act and the new pharma policy as a step in the right direction, the Indian Chamber of Commerce, Calcutta, has called for bolder measures to complete the "unfinished agenda for reform in Budget 2002-03."

In a statement issued here today, Mr A.V. Lodha, President of the chamber, said far greater reforms for internal liberalisation would be needed to achieve the Prime Minister's vision of a 8-9 per cent GDP growth.

On the move to offer VRS, he said labour reforms must get priority to ensure that industry was able to utilise the nation's manpower more effectively to build competitiveness. He felt that though a start was made with some announcements in the last Union Budget, the legislative changes were still due.

Complimenting the Government for taking bold steps in the area of PSU disinvestment, Mr Lodha expected the process to continue and provide a stimulus for growth in the different sectors. Describing the move to announce sugar decontrol as timely, he said it has to be essentially accompanied by the setting up of a system for futures trading, without which the decontrol would not be effective.

According to the ICC chief, it was imperative that India now moves towards establishing Commodity Exchanges, as prevalent all over the world. This, he felt, would also require the setting up of a regulatory body to monitor the exchanges and provide the necessary checks and balances to the system. The removal of cement, silk textiles and other items from ECA would help in eliminating market distortions, he pointed out.

Stating that the vision to achieve an 8-9 per cent growth could be possible only if a larger population in the country was empowered to earn, save, spend and invest, Mr Lodha said unless the capacity to earn and save was enhanced, GDP growth would continue to remain below the 6 per cent level.

"This would require fiscal reforms in the Budget 2002-03 to ensure that disposable incomes are enhanced, thereby giving a fillip to spending in the economy.

He pointed out that China was aggressively pursuing a programme of heavy spending to ensure high growth in the economy. Internal reforms, he felt, were critical if Indian industry is to enhance its competitiveness.

According to Mr Sushil Dhandhania, President, Merchants Chamber of Commerce, with the removal of dozens of items from the purview of ECA and doing away with the requirement of licensing of dealers and restrictions on storage and movement of a number of essential food items, the reforms process has truly entered the internal trade sector.

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