Market-determined pricing
advocated
FM sets agenda
Tribune
News Service
NEW DELHI, Oct 25 — A
multi-pronged economic agenda to meet the challenges of
globalisation, as an appendix to the economic revival
package announced by the Prime Minister, was unfolded by
the Union Finance Minister Mr Yashwant Sinha here today.
The economic agenda
includes: "expansion of automatic route to
industrial approvals, gradual movement towards
market-determined prices, removal of control of movement
of goods (especially of agricultural goods) across
states, reconsidering the reservation of small scale
units, reforms in labour legislation, cap on government
borrowings, emphasis on human resource development and
strengthening infrastructure and financial sector.
The Finance Minister,
speaking at a session of the 71st annual meeting of FICCI
here, said that the government would soon expand the
automatic route for industrial approvals as part of a
multi-point economic agenda to meet globalisation
challenges.
"We are working on it
(expanding automatic route), very soon we will deepen and
set procedures so that we do not see hassles (in
industrial clearances ) as in the past", he said.
Automatic route for
industrial approvals need to be expanded to all areas of
enterprises barring a few exceptions. Other clearances
required from administrative ministries or the Foreign
Investment Promotion Board (FIPB) , he said, would have
to be done in 60 or 90 days.
"Once we have defined
the policy, any project falling within the policy
framework should be going through the automatic
route", he said adding that " we are working on
it and should be put in place soon".
Mr Sinha said only in
exceptional cases the corporates need to approach the
administration for approval.
Mr Sinha said he already
has had a meeting with Prime Minister A.B. Vajpayee on
this issue and it was the considered view of the
government that there should be no hassels in project
clearance. The question of 60 days, 90 days or 120 days
for getting approval should be a thing of the past, he
said. There should be an automatic institutional
framework to ensure that, he said.
Advocating a
market-determined pricing regime in India Mr Sinha said
that "we must let the market determine the
prices".
It is, however, not an
easy task and the government may find it difficult to
withdraw from trying to control prices in certain
cases." This is a very important aspect of internal
liberalisation" he said.
Underlining the need for
maintaining balances in macro-economic indicators, Mr
Sinha said that the prevailing high of six to seven per
cent fiscal deficit was not sustainable.
"We will have to
bring it (fiscal deficit) down to three per cent of Gross
Domestic Product (GDP) in two to three years", he
said. For this there is a need for a national consensus
to put a cap on government borrowings, he observed.
Mr Sinha emphasised the
need for free movement of goods, particularly
agricultural commodities, across states and regretted
that there did not fully exist a common market for all
the states in the country despite the fact a common
market for SAARC was much talked about.
Referring to reforms in
labour legislations, the Finance Minister said it was an
extremely sensitive area and progress was possible only
when there was a comprehensive social safety net.
Unless, there is a sound
social safety net, the industry cannot adopt a ‘hire
and fire policy’. In India, it (hire and fire
policy), at this point of time, will lead to all kinds of
social problems".
Urging the industry to
collaborate with the government in this matter, Mr Sinha
suggested that perhaps a national policy could be evolved
which was applicable to both public sector and private
sector concerns.
Referring to the issue of
reservation in small scale industries, Mr Sinha said that
"we cannot carry on with the policy of reservation
in an era of globalisation and regional trading
blocs" he said as otherwise the country would be
overtaken by events.
Stating the government was
committed to providing a world infrastructure and
financial sector, Mr Sinha said that some very important
steps needed to be taken in the short run "otherwise
Indian industry will continue to face some
problems".
Factor productivity,
especially labour productivity and human resource
development was another important area of reforms and
required immediate attention.
It is also important to
define the role that India has to play internationally.
"It is important that the voice of India is heard
internationally and trade and industry must join hands
with the government in this effort", he said.
Given the level of
competition that was being experienced today and with
technological advances,national governments would
increasingly become powerless to control the forces of
globalisation, he observed.
|
