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CII chief Rahul Bajaj rules out annual poll-funding, urges ordinances for pending bills

Newly elected president of the Confederation of Indian Industry, Rahul Bajaj today ruled out funding of polls by the corporates if elections are held each year.

''1999's general elections would be the third in three years and there were five prime ministers in this span,'' Bajaj said while answering a question on election funding by India Inc.

Those industrialists who are weak and afraid will help fund the polls each year, he said.

''State funding of elections should be done once in five years,'' Bajaj emphasised in his first media conference as the CII president.

Bajaj reiterated the industry's fear that for any well functioning economy there is a need for political stability and a five-year period of smooth running for the government.

''The country will suffer because of an inefficient government.… We would like polls to be held as soon as possible.''

While bringing about electoral reforms, only those parties with over ten per cent of total votes polled must be recognised. The successor prime minister must be named during the vote of no confidence. Moreover, repoll must ensure that the winning candidate has majority votes in the Lok Sabha, he said.

A large number of reforms are still pending because the prevailing political uncertainty has threatened to bring decision-making to a halt. Eleven ordinances should be issued by the government on bills which had already been introduced in Parliament and had been vetted by expert committees.

The new president recommended issue of ordinances to replace the following bills.

• The Insurance Regulatory Authority Bill.
• The Money Laundering/Foreign Exchange Management Bill.
• The Companies Bill
• The Income Tax Bill
• The Sick Industrial Companies Bill.
• The Securities Contract (Regulation) Amendment Bill.
• The Essential Commodities (Amendment) Bill.
• The Export/Import (Amendment) Bill.
• The Recovery of Debts due to Banks and Financial Institutions (Amendments) Bill.
• Tthe Technology Bank of India Bill.
• The Commodities Boards and Industry Development Bill.

He expressed dismay that no implementation of policies have been taking place.These included:

• Mega power projects.
• New exploration licensing policy.
• Empowered inter-ministerial group
• Wireless planning coordination committee
• Housing policy.
• Highway policy.
• Expenditure Management Commission
• Setting up of the Foreign Investment Implementation Agency for time-bound clearances.
• Disinvestment of approved PSUs.

Bajaj said the financial sector is over-controlled and under-regulated. There is a need for effective supervision. There must be an efficient credit delivery mechanism, capital adequacy norms from eight per cent to 12 per cent by 2002. There must be income recognition norms, prudential norms and disclosure standards.

The Indian financial sector must also move towards international accounting standards, improve lending environment and create universal banking through mergers. Bankruptcy laws must be amended while strengthening debt recovery.

The FIIs must be encouraged to enter the debt market, broadbanding of pension and provident funds, debt markets must be promoted through giving hedging facility, interest rate swaps and debt securitisation.

''Venture capital which has been instrumental in the growth of small-medium enterprises abroad has been a failure in India because of the lack of understanding of its needs, inadequate and inappropriate laws and lack of exit options,'' Bajaj said.

Venture capital he said must be allowed to invest in the service sector, especially the electronic media, Internet, publishing, health-related services, hotels and tourism.

On subsidies, he said, they should be phased out on fertilisers, food, power, water, public transport and education. Rich farmers should not get the benefit of subsidies. The income tax payers must be exluded from the benefits of public distribution systems while leakages must be arrested and delivery mechanims must be improved.

On the small-scale industry, he said while 837 products have been reserved in the sector, 233 are not being produced. In 1998, India's exports in the sector were $ 13 billion, while China's were $ 75 billion. There is a need to abolish inspector raj, provide more teeth to the Delayed Payments Act, amend labour laws, introduce rehabilitation funds for viable sick units in the SSI sector. A separate policy must be introduced for the tiny sector.

Bajaj projected a fiscal deficit of 6.8 per cent for 1999-2000, a GDP of six per cent and an inflation rate of six per cent.

Bajaj, who is the chairman and managing director of Bajaj auto Limited, also said the only solution to the Delhi's pollution problem is to set up a mass rapid transport system.

''For 20 years, I'm only hearing that an MRTS is being planned for Delhi but nothing has happened yet. Why?'' asked Bajaj.

Bajaj ascribed to the Supreme Court judgement on slapping a ban on private vehicles without Euro II norms in the National Capital Region from April 2000. ''Nobody can dispute the desire of the Supreme Court since 50 to 60 per cent of the pollution is emitted by vehicles.''

He said dirty and old vehicles must be out but do not stop new ones from hitting the roads.

The court order forces auto manufacturers in India to adopt Euro norms in the next 11 months as against the year 2005 notified by the Central government.

Auto sales in the largest market segment -- NCR -- would be hampered as almost all auto-makers, reeling under recession are yet to adopt Euro 11 emission standards.

Interview with Rahul Bajaj

UNI

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