Financial Daily from THE HINDU group of publications
Tuesday, Feb 26, 2002
Industry & Economy
Government - Policy
Put reforms on the fast track: Narayanan
The President, Mr K.R. Narayanan, being led to the joint sitting of Parliament by the Chairman of the Rajya Sabha, Mr Krishan Kant, the Lok Sabha Speaker, Mr G.M.C. Balayogi, and other dignitaries on Monday.
NEW DELHI, Feb. 25
THE President, Mr K.R. Narayanan, today underlined the need to "accelerate a host of reforms to enable the economy to reach a trajectory growth of 8 per cent and above, even as the advance estimates for the current year revealed a pick-up in growth to 5.4 per cent, restoring India to the group of the five fastest-growing, large economies in the world."
In his customary joint address to both the Houses of Parliament on the eve of the Budget session here, the President said the attainment of the Tenth Plan targets covering economic, social and environmental dimensions of human development was contingent on "our ability to significantly increase the investment rate and step up the productivity of existing capital assets."
He said it also depended on "our ability to undertake second generation of policy reforms to improve the efficiency of new investment and facilitate and encourage deepening and broadening of reforms in all the States.''
Complimenting farmers for reaping a bumper crop, as the output of foodgrains would touch a new high of 210 million tonnes in 2001-02, the President said the Government proposes several measures to "free Indian agriculture from the shackles of the past."
The Essential Commodities Act would be modified and sugar industry decontrolled with restrictions on inter-State movement of farm goods being removed to enable farmers realise better prices. The Government would strengthen the co-operative sector and timely and adequate credit would be ensured by beefing up the rural credit co-operatives.
As wastages and losses in production, transportation and distribution remain a bane of the food economy, the Government proposes to formulate a comprehensive strategy to check these losses currently estimated at over Rs 70,000 crore a year, he said.
Mr Narayanan said industrial growth at 2.2 per cent during April-November 2001 was lower than six per cent in the comparative months of 2000 due to external slowdown, inherent adjustment lags of corporate restructuring and the consequent decline in both consumer and investment demand.
He lauded the various policy reforms to improve the economic milieu and remove infrastructure bottlenecks by the Government and singled out telecom services including basic lines and cell-phone, besides bringing the benefits of IT to the masses.
Mr Narayanan said, "if providing digital connectivity" is one of the priorities, the other is to "speedily and significantly improve physical connectivity all across the country" through national highways and rural roads programmes.
He said the Government would soon announce new policy initiatives to encourage Indian-owned shipping compani- es to compete globally.
Pointing out that the Indian power sector remains at a crossroads, the President said the primary reason for the alarming situation in the power sector was the deteriorating financial health of the State electricity boards and State utilities whose losses had gone up from Rs 4,560 crore in 1992-93 to Rs 20,527 crore in 2000-01.
It is only to give further impetus to reforms in the electricity sector that the Government has drafted a new Electricity Bill, which would make reforms mandatory across all States and set up their own State Electricity Regulatory Commissions.
On disinvestment, the President said, "It is no longer a matter of choice, but imperative" as "the prolonged fiscal haemorrhage from a majority of the public sector enterprises could not be sustained any longer". Pleading for a system of quick takeover of non-viable units to ensure productive utilisation of resources, Mr Narayanan said, "There is a need to urgently bring about a bankruptcy legislation, which will allow quick payment of the dues of workers and exit of non-viable firms."
The President said, with the removal of quantitative restrictions, the small-scale sector had to "raise its efficiency; to attain global standards in product quality with internationally competitive prices". He said the Government was already implementing many schemes to assist the sector and "more will be formulated, if necessary".
On defence, the President said that far-reaching reforms were being carried out in the higher defence management, leading to closer co-ordination between the three services of the armed forces and integration of military and civilian defence structures.
A separate defence procurement board has been set up to speed up defence purchases and make them more responsive to needs of the armed forces and to bring greater transparency in procurement.
The President also dwelt at length on various political issues and diplomatic relations with neighbours and the world at large as also the Government's determination to end cross-border terrorism and promote and preserve communal harmony and adherence to the secular ideals of the Constitution.
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