The Hindu Business Line : PSU privatisation inadequate, says CII survey

Although the economic reforms initiated in 1991 have been beneficial to the country, a lot still needs to be done, says a countrywide survey conducted by the Confederation of Indian Industry among leaders of industry, on the country completing 15 years of economic liberalisation.

The abolition of industrial licensing was considered the most successful measure with 72 per cent of the respondents approving of it. However, 81 per cent of them felt that privatisation of public sector undertakings had been "inadequate and below expectations".

In the area of taxation reforms, 64 per cent of the respondents approved of the rationalisation of customs duty as peak duty was reduced and number of slabs were brought down. The introduction of value added tax (VAT) was also seen as a positive move by 63 per cent respondents. However, in the case of VAT, 65 per cent of the respondents felt that more needed to be done for the reform to be complete.

The financial sector reforms were considered beneficial to the growth of industry. Among these, the highest ratings were given to the entry of private sector banks in the financial scene, and the enactment of the Depositories Act in 1996 allowing dematerialisation of securities. They were ranked 69 per cent and 63 per cent from the respondents respectively.

Seventy per cent of the respondents felt that the progressive elimination of import licenses had been critical to the reform process. The replacement of the Foreign Exchange Regulation Act by the Foreign Exchange Management Act 1999 was approved by 57 per cent of them.

Seventy per cent of the respondents approved of the telecom policies, however, 90 per cent of them felt implementation of the Electricity Act 2003 was incomplete and further reforms were required in the sector.

Almost 80 per cent of the respondents felt education sector required reforms, while 66 per cent of them accorded high priority to reforms in labour regulations.

Other sectors considered to be of high priority were agriculture and healthcare, according to 68 per cent of the respondents. Transportation, including ports and airports, was also given high importance going forward.

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