The Hindu Business Line : Expert proposes enterprise development panel

Globalisation
The pattern of globalisation experience in Kerala has had its strongest effect on culture.
A major change in the culture, in turn, has its effects on the economy in terms of new demands, which warrants new patterns of investment. It also has a significant impact on the labour market.

Kochi , May 25

The main constraint of Kerala's industrial development policy, from time to time, is its effort to artificially cover up the basic contradictions relating to the objectives of industrial development, according to Dr P.M. Mathew, Director, Institute of Small Enterprises Development, here.

As a suggestion to the new LDF Government, which took over from the UDF last week, Dr Mathew said that it was high time that, at the highest policy levels, these contradictions are properly appreciated and suitable strategies are evolved. As an important step towards this direction the State should set up a permanent Enterprise Development Commission (EDC), which should address all the issues and make recommendations to the government, he said.

"Even the Bureau of Public Enterprises, which is a part of the Secretariat, should be dismantled and merged with the proposed EDC," he said.

Best approach

The past "ad hoc approaches of some Ministers bringing major projects, and making policy pronouncements should go" and that is possibly the best approach by which the new government can act upon quickly, he said.

The vital question of public policy, he said, should be to reduce contradictions and for which "there should be a strong and transparent mechanism, which is characterised by expertise, authority and visibility".

For instance, he pointed out, setting up of an Info Park, for some, may mean the key to industrial promotion, for others, it may be revival of traditional industries. But can be prioritised only through transparent mechanisms. This is what the proposed Enterprises Development Commission should attempt at, he said.

The crucial indicator often cited, has been the number of work stoppages, and labour unrest, in general.

While the absolute level of work stoppages has progressively come down during the past one decade, the present debate is around the attitude towards foreign capital.

Hence, it has often been argued that, the attitude towards large capital or even foreign capital, by a dominant section of society is often hostile and, as such, it gives a biased image on the State.

Another set of arguments is based on the proposition that Kerala is generally investor-friendly, and the arguments for large projects and foreign capital are often motivated.

Political parties and coalitions focus their arguments largely on this traditional line of argument, with old premises of a closed economy, the hegemony of public policy in shaping the pattern of the investment, and the relatively less significant role of the private sector.

The situation has changed significantly during the past few years. Public policy has been redefined as playing a supportive role, where private interests play a hegemonic role in the economy.

The pattern of globalisation experience in Kerala has had its strongest effect on culture. A major change in the culture, in turn, has its effects on the economy in terms of new demands, which warrants new patterns of investment. It also has a significant impact on the labour market.

From the point of view of policy-making, the question is whether the government should interfere in economic activities, and if so, to what extent. Every project let it be infrastructure, large industries, small industries or micro enterprises, are subject to contradictions as also, conflict of interests among their promoters. Therefore, it is better to have mechanisms, which help to resolve such contradictions, he added.

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