The Hindu Business Line : India Inc's thumbs up for draft CMP

Reacting to the draft, Mr Yogendra Kr Modi, President, the Federation of Indian Chambers of Commerce and Industry (FICCI), said: "We are significantly encouraged by its direction and content."

On the issue of growth percentage of 7 - 8 per cent that is being reflected in the draft CMP, FICCI has suggested considering a target of 10 per cent GDP growth as stated in the Congress manifesto. A 10 per cent growth would provide 3.9 million agricultural jobs, 25.8 million industrial jobs and 30.4 million services jobs, thereby addressing the 60 million jobs that are needed over the next five years, he said. Commenting on the desire to use privatisation revenues for designated social sector schemes, Mr Modi said, "an acceleration of the disinvestment and privatisation programmes is a must if a substantial increase in public investment in health and education is to be achieved."

While welcoming the increase in allocation for education to 6 per cent of GDP and particularly half of it to primary and secondary education, the chamber said, the funding of this through a tax increase via cess will, in fact, reduce revenue collection rather than generate extra resources. The idea of a cess conflicts with the draft CMP's own emphasis that "tax rates will be stable and conducive to growth, compliance and investment''. Also special cesses to fund a particular activity complicates the tax system and are avoidable as the provision will hamper better compliance, Mr Modi said.

Suggesting alternative methods to provide additional resources for primary education, the chamber suggested the phasing out of subsidies in higher education and transferring these funds to primary education. It felt that higher education could rely more on private funds, soft loans and scholarships that could take care of the poor but deserving students so that higher education is available to each and every Indian who is competent. Another approach could be to encourage private participation in primary and secondary education as demonstrated by the successful Kerala model.

The President of the Associated Chambers of Commerce and Industry (Assocham), Mr Mahendra K. Sanghi, in a statement said, "To enhance growth in both the agriculture and manufacturing sectors, the key reforms that are required is removal of Government control and intervention in these activities. Besides, allowing free play of market forces, albeit with ensuring social security net and minimum support for the poorer sections of society."

He said: "We therefore recommend that the new Government focuses on policy making and its implementation rather than engaging in economic activities. For that, we should immediately institute private-public partnerships with an ultimate intention of disinvestment."

Further, the chamber hoped that the CMP would focus on areas where Central Government policies can be adopted and implemented rather than concentrating on areas that are on the concurrent or the State lists.