The Hindu Business Line : YSR moots panel for interaction with industry

The Chief Minister, Dr Y.S. Rajasekhara Reddy, at the executive meet of FICCI along with Mr Amit Mitra (left), Secretary General, and Mr Yogendra Kumar Modi, President, FICCI, in Hyderabad on Thursday. - A. Roy Chowdhury

Hyderabad , Aug 5

THE Andhra Pradesh Chief Minister, Dr Y.S. Rajasekhara Reddy, announced that a committee comprising the representatives of the State Government and industry would be set up to have a regular interaction between the Government and industry.

Addressing the Executive Committee meeting of the Federation of Indian Chambers of Commerce and Industry (FICCI) here on Thursday, Dr Reddy said that the State administration strongly believed that continuous interaction with the industry was extremely important. "Continuous interactions can sensitise the Government to the problems faced by the investors and improve investors confidence leading to greater flow of investments in all sectors."

The Chief Minister told the captains of the industry that he was anticipating an industrial corridor between Kakinada and Visakhapatnam in the State that would house a petrochemical complex apart from biotechnology and chemical technology units. The State Government was interacting with the Union Government with regard to the development of Visakhapatnam and Gangavaram ports.

He informed that his Government was creating a special fund called "SMEAR" (Small and Medium Enterprises Assistance and Restructuring) to kick-start the revival of all viable sick industries in the State. Reputed agencies were already doing a quick survey of sick units to identify the viable units and prepare customised plans for their revival.

He said that the State Government also intended to come out with sector specific policies for each of the identified thrust sectors. This would address the specific needs and problems of these sectors in a focussed way. The State Government's thrust areas would be food and agro industries, pharmaceuticals, biotechnology, high tech manufacturing and small-scale industries.

Stating that the AP had failed to surge ahead on the industrial front during the last decade, Dr Reddy said, "We are taking a re-look at our policies to restructure them. This will enable the State to realise its true potential and make it the most favoured destination for industrial investments." The State Government had also set up an Industrial Infrastructure Development Fund to provide infrastructure at the doorstep of new industrial units.

The Chief Minister asserted that his Government was committed to power sector reforms. Various measures, involving an investment of Rs 5,000 crore, were being taken up to reduce the transmission and distribution (T&D) losses. The T&D losses would be brought down to 16-17 per cent in the next two years. He, however, defended the Government's policy to provide free power to the farm sector.

Earlier, FICCI President, Mr Yogendra K. Modi, made a power point presentation on issues pertaining to Andhra Pradesh and FICCI's suggestions for the development of the agriculture and industrial sectors in the State. He suggested setting up of Advisory Council with leading industrialists for reviewing Government policy and implementation issues.

On the agricultural front, FICCI wanted the State Government to set up a nodal authority with full responsibility for project implementation after proper evaluation of current status in two months. It also suggested establishment of food parks through private-public partnerships, encouragement of contract farming and abolition of Agriculture Producing Marketing Act that prohibited farmers from selling their produce directly. FICCI also suggested that power subsidy to farmers should be restricted to a definite number to prevent inefficient use of scarce resources.

With regard to the industrial sector, FICCI sought a stable industry policy and greater flexibility in use of labour by suitable changes in labour laws. It wanted the State Government to allow contract labour in all segments. FICCI emphasised that this would give a competitive advantage to AP vis-à-vis other States.

In the social sector, FICCI suggested to the Government to spend more on primary education, link ITIs and polytechnics to industry through the 40-60 model, increase State spending on health sector and raise cost recovery in the health sector from the current 2.1 per cent to above 25 per cent over the next three years so that the subsidy amount would go to the poorest of the poor.

As far as fiscal management was concerned, FICCI suggested implementation of VAT, introduction of a fully funded pension scheme for Government employees and limit growth of subsidies through proper targeting. It also suggested disinvestment of all loss making public sector enterprises (PSEs) and reduction of Government holding in other PSEs to 26 per cent.

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