New Delhi, July 8
IMPROVEMENT in infrastructure, easier access to coal, lignite and iron ore, financial sector reforms and stronger intellectual property rights regime were some of the issues that figured prominently in Friday's meeting between the Finance Minister, Mr P. Chidambaram, and the Chief Financial Officers (CFO) of top-rung corporates.
The Finance Minister assured the participants at the meeting, which was his first with CFOs, that all bottlenecks in the way of investment and growth would be removed. He also said the Government would carry out necessary procedural improvements.
Briefing newspersons about the meeting, which was attended by more than 15 CFOs representing almost all industrial and service sectors, Dr Ashok Lahiri, Chief Economic Advisor in the Union Finance Ministry, said more investments were required for the creation of fresh capacity and achieving higher growth.
Acknowledging that productivity of the Indian industry had improved, Dr Lahiri, however, highlighted that leveraging of productivity for further growth was limited.
A large part of the meeting was focussed on improving investment climate and the regulatory issues surrounding the focus areas of infrastructure, finance and fuel supplies. Issues such as globalisation and exchange rate also figured in the discussions. However, there was no discussion on disinvestments.
Dr Lahiri said some of the CFOs made a case for easier access to coal, lignite and iron ore and the need to relax rules for this purpose.
Stating that the foreign investors' perception about India had improved, Dr Lahiri said sectors such as auto, auto components, agro-based industries, pharma, tourism and hotels were poised to witness major investments in the coming years. He also said stepping up rural credit was a pre-requisite for fostering industrial growth. "The Finance Minister has said rural credit was one of his priority areas. Industry would grow better if rural credit increases," Dr Lahiri said.
The A.V. Birla group company Grasim's CFO, Mr D.D. Rathi, underscored the need for better access to fuel supplies. "We are facing a fuel famine," he said after the meeting. Mr Rathi also called for debt market reforms.
Mr Bharat Doshi, Executive Director (Finance and Corporate Affairs) of Mahindra & Mahindra, suggested that non-banking finance companies should be permitted to extend loans to the rural sector and the Reserve Bank of India must change its norms for this purpose.
The Finance Minister, Mr P. Chidambaram, is likely to have another meeting with CFOs after three to four months, and indications are that taxation issues will come up for discussion at that meeting.