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The Amit Mitra Chat

Amit Mitra It was by coincidence that we had Dr Amit Mitra, FICCI secretary general, on the Rediff Chat on Friday evening, 24 hours after the Enforcement Directorate's raids on ITC -- a member of FICCI -- began. Dr Mitra was thus in pole position to cast light on the ITC controversy for the benefit of an international audience who hung on to his every word.

Excellent stuff! Check it out.

Nikhil Lakshman (Fri Nov 1 20:26:22 1996 IST):

Good evening, Dr Mitra. It's good to have you with us this evening, for what I hope will be a series of regular chats. I do hope you enjoy the experience.

Bobby (Fri Nov 1 20:27:25 1996 IST):

Is there anyone out there?

Bobby (Fri Nov 1 20:27:47 1996 IST):

Is there anyone out there?

Cynthia Morgan (Fri Nov 1 20:30:44 1996 IST):

Hi guys, am back! The morning Chat was useful. I am sure Dr Mitra will be very eloquent.

Hetal Shah (Fri Nov 1 20:31:22 1996 IST):

Cynthia, where are you from?

Preethi (Fri Nov 1 20:31:27 1996 IST):

Hi guys!

Preethi (Fri Nov 1 20:32:03 1996 IST):

Hi Bobby!

Bill Boothroyd (Fri Nov 1 20:32:08 1996 IST):

Good evening! I understand that the ITC chaps are in a lot of hot water. Is this not sympotamatic of Indian business? Bending the rules all the time! Why does this happen, Dr Mitra?

Bobby (Fri Nov 1 20:32:11 1996 IST):

Hello hello hello is there anyone IN there? Just knock if you can read me?

Preethi (Fri Nov 1 20:32:45 1996 IST):


REDIFF ON THE NET (Fri Nov 1 20:36:15 1996 IST):

We just heard that Dr Mitra and the Rediff team in Delhi are having difficulty getting through. Just hang in there for some time, fellas.

REDIFF ON THE NET (Fri Nov 1 20:37:16 1996 IST):

We just heard that Dr Mitra and the Rediff team in Delhi are having difficulty getting through. Just hang in there for some time, fellas.

Bobby (Fri Nov 1 20:38:10 1996 IST):

yeh sab kya ho raha hai!

Killer (Fri Nov 1 20:43:34 1996 IST):

Hi, Jacko is playing live in Aamchi Mumbai , what are we doing here?

Dr. Amit Mitra (Fri Nov 1 20:46:29 1996 IST):

Hello, This is India calling. YOu have any question to provoke me to speak? Shoot.

Killer (Fri Nov 1 20:46:30 1996 IST):

Nikhil, preeti, bobby lets start abt Jacko & Indian Economy

Bobby (Fri Nov 1 20:46:33 1996 IST):

we are talking to amit mitra on how to become wealthy so that the next time, WE can ATTEND the MJ show instead of chatting here!!!!!

Killer (Fri Nov 1 20:48:12 1996 IST):

tell us Dr. why Chugh is behind bars. We thought only politicians are doing it.

Hetal Shah (Fri Nov 1 20:48:36 1996 IST):

Dr Mitra, I am writing in from USA. To veer off, what is going in all this ITC case and arrests. Are businessmen also going the way of our scoundrel politicians?

Killer (Fri Nov 1 20:49:27 1996 IST):

Bobby, First take a membership of FICCI

Bobby (Fri Nov 1 20:50:25 1996 IST):

Dr Mitra, the question on Chugh and ITC are interesting? Is ITC part of FICCI? And does FICCI have a code of ethics for its members?

Dr. Amit Mitra (Fri Nov 1 20:50:57 1996 IST):

Bill:You will appreciate that five years ago this economy was a state led economy with the proliferiation of licenses quotas and controls, you are quite aware that under those circumstances rent seeking using the grey area of the law to simply fight for a small bit of private space was the order of the day. The private sector simply had to respond to the system that the government set up, all of a sudden, and thank God, the rules of the game have changed in 1991 towards greater transparency and less of government rules and regulations. The private sector is thus restructuring it's approach and the ITC development may be a part of climbing the learning curve in amarket led economy of the future.

Killer (Fri Nov 1 20:51:09 1996 IST):

Dr. Mitra pls pls pls start answering

Cynthia (Fri Nov 1 20:52:47 1996 IST):

Dr Mitra, at very last. This morning, I asked P G Kakodkar, the SBI chairman, for his perceptions of the way the Indian economy was headed. In the West, we have the impression that India is on the verge of a recession. Is that correct?

Killer (Fri Nov 1 20:52:59 1996 IST):

Dr. Mitra, do you feel that these cleansing process or whatever we may call it in Business & politics will go on for some time & in end we will end up better.

Hetal Shah (Fri Nov 1 20:53:29 1996 IST):

Are you trying to say that ALL corporate bodies indulged in bypassing the laws? Then perhaps after the politicians, it is the time of businessmen to face the overactive judiciary?

Bill (Fri Nov 1 20:54:04 1996 IST):

But Dr M, Indian industry has been through such catacylysmic developments before, notably in 1986 during the V P Singh era at your finance ministry. How can you be so sure that lessons will be learnt?

Bobby (Fri Nov 1 20:54:29 1996 IST):

Hey, there is no bill in here. only myself and killer, and clinton hasn't yet logged on.

Bill (Fri Nov 1 20:56:02 1996 IST):

Who is this ass named Bobby? Get the hell out of here if you have nothing to contribute but infantile humour!

Amit Mitra Dr. Amit Mitra (Fri Nov 1 20:56:03 1996 IST):

Bobby: As the apex chamber of India with all the heavy hitters of India on our team, quite naturally ITC is a corporate member of FICCI and has often contributed to a great synergy between global and Indian businesses. Obviously, FICCI is carefully looking and analysing the current developments and will act once the picture becomes clear. As for a code of ethics over the last one year there have been major discussion within FICCI not only on the subject of a market code of conduct but also on broader issues of governance and social empowerement. I assume the ITC case in it's final form will precipitate a conclusion to the issue of ethics in business in the new liberalising envoirnment in India.

Ryan Marshall (Fri Nov 1 20:56:58 1996 IST):

Good evening, Sir. It's a pleasure to speak with you today. And thank you Rediff for bringing us two names in one day.

Bobby (Fri Nov 1 20:57:27 1996 IST):

Businessmen for years have been looked upon wiht suspicion? Will not the recent disclosures of ITC bring back the suspicions, which were on the wane after the reforms? and it seem that in the JMM case, Reliance, Essar, Videocon were involved? So who's next?

Ryan Marshall (Fri Nov 1 20:58:00 1996 IST):

Do organisations such as yours have a clear policy on foreign investment. The CII, I know, was very worked up about it some months ago. What's FICCI's stand?

Cynthia (Fri Nov 1 20:58:48 1996 IST):

It has taken you one year to reach a deadlock over a code of ethics. What's the hassle?

Bobby (Fri Nov 1 20:59:13 1996 IST):

Thanks, Dr Mitra, for the reply. But another query. Will a code of ethics stiffle industrial growthy, given the high level of corruption in India? And politicians still call a lot of the shots in India? Can we bypass corrupt politicans?

Dr. Amit Mitra (Fri Nov 1 21:00:17 1996 IST):

Bill: The most effective lesson will come from the market process where consumers and investors in the capital market will provide a final judgement now that we have a more open economic system companies have become understandbly sensitive to the signals since their life depends on them. During the V P Singh period the system was still government led and imports substituting in other words a closed economy. Thus the lessons were never learned through the final arbiter--- market place of consumers and share holders.

Hetal Shah (Fri Nov 1 21:02:57 1996 IST):

Will not corruption scare away foreign investors and capital? Can India really afford this when it needs investment so badly? Look at the Enron case, it has been stuck for years? Makes someone in the US think that only corruption works in India? Dr Mitra, your comments.

Bill (Fri Nov 1 21:04:10 1996 IST):

I doubt it, Sir. Do you think corporations who find themselves in some bother over the JMM bribes issue will learn? I believe the system is biased towards corruption and crookedness. All this talk about glasnost and perestroika is so much hogwash, and I wish you in industrial associations would have the courage to come out in the open about it.

Bobby (Fri Nov 1 21:04:42 1996 IST):

Dr Mitra, there are 3 corporate apex organisations in India. Cannot the three work together in certain policy areas? Why does India need three such organisations -- FICCI, CII, ASSOCHAM

Bobby (Fri Nov 1 21:06:02 1996 IST):

bill, cut the comedy!

Killer (Fri Nov 1 21:07:37 1996 IST):

Dr Mitra, I agree with Bill, businessmen takes pride in their association with corrupt politicians. Even in case of bold disclosures by media. Why is it so that a businessmen feels unsecured if he is not patronised by bigshot politicians. pls answer

Ryan Marshall (Fri Nov 1 21:07:40 1996 IST):

People speak of China and Indonesia as being countries where one cannot do business without graft. But I believe India is the most corrupt country in the world. Nothing in your country works without corruption, and I am ashamed to say Indian businessmen are worse than the worst one encounters in Far East Asia. Perhaps it is a residue of your history.

Hetal Shah (Fri Nov 1 21:08:01 1996 IST):

Dr Mitra, you may not like to hear this, but it does appear, at least through the media, that FICCI is not active as CII? Is this true?

Hetal Shah (Fri Nov 1 21:08:01 1996 IST):

Dr Mitra, you may not like to hear this, but it does appear, at least through the media, that FICCI is not active as CII? Is this true?

Cynthia (Fri Nov 1 21:08:07 1996 IST):

Very interesting questions, Sir.

Dr. Amit Mitra (Fri Nov 1 21:08:32 1996 IST):

Ryan: Unfortunatley, we learnt from the press that CII, atleast my counter part allegedly called MNCs cowboys and those with a one night stand approached to investment. Honestly, I do not know why this happened all of a sudden but it did hurt the credibility of CII since the change was far too sudden and inexplicable As for FICCI stand-- we have publicly said that FDI in the infrastructure area should be offered a dominant role without any hesitation since India needs 250 billion US $, in the next 5 years. We have also suggested that MNCs should be given a leadership role in the area of export related investments. China for e.g: has 57% of it's FDI related to export industries and Thailand allows 100% equity holding only if you export 80%, We in FICCI feel that MNCs must be encouraged to export and be allowed very high euity holdings. AS for the remaining industries, the approached should be one of empowering good Indian companies while benefiting from this partnership vis a vis the MNCs. i.e a non zero sum or win-win approach so that over time Indian companies can also join their foreign counter parts as global players.

Bobby (Fri Nov 1 21:09:13 1996 IST):

How long will FICCI take to declare its code of ethics? And will it remain only a paper tiger?

Killer (Fri Nov 1 21:09:31 1996 IST):

Dear bobby, let Dr. answer few basic qt.

Hetal Shah (Fri Nov 1 21:14:56 1996 IST):

Dr Mitra, it is very disheartening to read that you to support a sort of limited area for TNC (MNCs in India). For years this half-baked approach has ruined the country's economy. Why can't TNCs just be allowed. India needs investment, and once it comes in, it will also spread out into different areas. And seeing the way you treated Enron, who'd believe that India was desperate for ifrastructure investment?

Bobby (Fri Nov 1 21:17:25 1996 IST):

Dr Mitra, no replies from your side for a long time?

Killer (Fri Nov 1 21:18:08 1996 IST):

Dr. Mitra do you think TNCs also resort to same techniques of bribing when they invest in developing countries.

Hetal Shah (Fri Nov 1 21:18:43 1996 IST):

What's up? or should I say down?

Hetal Shah (Fri Nov 1 21:18:44 1996 IST):

What's up? or should I say down?

Dr. Amit Mitra (Fri Nov 1 21:18:50 1996 IST):

Hetal: You may not be aware that there is a fundamental structural difference between the two organisations. FICCI is a federation of 500 chambers and associations spread across the country with a toal membership of atleast 100 thousand units further more over 2,500 companies are our direct members and 35 giants of India-- the Birlas, the Goenkas, the Kanorias, the UB group, the NIppon-Denro Ispat group and many such massive houses of India are our corporate members. CII on the other hand, good as they are in their work is not a federation of chambers. It only has direct company membership. And that too 94% of their membership is in engineering industries. And they do not allow trade to be a part of their chamber activity. This description simply means that the political clout of FICCI as the grass roots level is vast and includes practically every industrial concern and size of industry. Of course, we are not media driven and often take a deeper and more substantive intellectual approach to problems. You can thus appreciate that I joined FICCI after having done my doctoral work from Duke university because I felt there is a seriousness to my work that matches no other.

Hetal Shah (Fri Nov 1 21:20:31 1996 IST):

:-) :-)

Ryan Marshall (Fri Nov 1 21:20:45 1996 IST):

Do you get the impression as we do in the West that the Indian economy is heading for a slowdown? Is it because of political compulsions? I cannot for the life of me understand how the Great reformer Chidambaram has become such a mouse at the Fin ance Ministry.

Hetal Shah (Fri Nov 1 21:22:01 1996 IST):

Thanks Dr Mitra, but do I get the impression that you think CII is more interested in the media?

Bobby (Fri Nov 1 21:23:43 1996 IST):

Dr Mitra, will FICCI take any action against ITC now, like suspending its membership, or some such similar thing?

Cynthia (Fri Nov 1 21:23:47 1996 IST):

If a client with $ 50 million asked me where he should invest the funds -- India or Indonesia. Could you give me five solid reasons why I should invest in India? In Jakarta, President Suharto's government is stable, not fickle or insincere about foreign investment. The government actually encourages foreign investors not like in your country where we are seen as some insidious saboteurs.

Hetal Shah (Fri Nov 1 21:29:32 1996 IST):

Dr Mitra, do you think the present government is good for India's economic health? I keep reading out here that the reds are forever opposing every good policy of the government? How long can this go on? Will India continue to remain the pauper of Asia?

Dr. Amit Mitra (Fri Nov 1 21:30:56 1996 IST):

Hetal: You will be happy to know that I personally went on CNN and condemned the cancellation of the Enron deal thus FICCI is clear on the need for FDI in the infrastructure sector as for the issue on sector specific or limited equity, please study the east asian experience and also look in to the telecom area in India where equity was restricted to 49% by MNCs and yet all major telecom players of the world formed joint ventures and participated in contract bidding. In other words it is the clarity of policy and simple rules of investment which define the flow of investment may I also add that every major consumer goods MNCs is here in India whether it is Pepsi, Coke, Sony, Kellogs, Whirlpool, Mcdonalds, Pizza Hut or Westing House, Black and Decker. So the market is open and you needn't fear as long as the globalisation process continues.

Bobby (Fri Nov 1 21:31:08 1996 IST):

Which area does India require the most urgent work in? And what is FICCI doing in that? Second question, how much influence does FICCI have with the government?

Dr. Amit Mitra (Fri Nov 1 21:37:15 1996 IST):

Cynthia: First of all, are you not aware of the tremendous strife between Mr Sukarno's famous daughter and mr Suharto's the President. Such events are natural to evolving democracies. Infact, governments have changed in India without a single moment of uncertainty in the political system. The reforms of 1991 began with aminority government of Mr Rao. The current govertnment of 13 political parrties have continued the pace of reforms with over 400 big ticket investment projects cleared within 45 days. So, do not be concerned after all Italy had many governments one after another Japan's Prime minister was removed over charges of corruption and the former president of South Korea was condemened to death. Yet, those economies continue aggresively and so will India.

Hetal Shah (Fri Nov 1 21:37:44 1996 IST):

Dr Mitra, are Indians still fearful of everything foreign? Look at the raucus over the Miss World contest in Bangalore? Earlier there were attack on Pizza Hut and McDonald's. Is anything being done to change the people's attitude towards TNCs and foreigners? Arn't Indian becoming extremely xenophobic?

mog! (Fri Nov 1 21:38:08 1996 IST):

Hello! FICCI appears irelevant in the charged/changed new world mainly because it pushes the cause of so called established associations. Comment?

Bobby (Fri Nov 1 21:39:51 1996 IST):

FICCI has expertise in many areas? But on which are you concentrating?

mog! (Fri Nov 1 21:41:40 1996 IST):

Hello again! FICCI-FICCI anyone ?

Bobby (Fri Nov 1 21:42:55 1996 IST):

No answers to queries on FICCI?

Cynthia (Fri Nov 1 21:42:57 1996 IST):

Dr Mitra: The conflict -- if you can call it that -- between Megawati Sukranoputri and Suharto will not seriously undermine the investment culture in Indonesia. Investors want coherence in policy, not all this hot air about democracy. Let us have stability in fiscal policy, Doctor!

Dr. Amit Mitra (Fri Nov 1 21:43:05 1996 IST):

Ryan: I must confess that Indian economy has finally marketised to the degree that has made business cycles palpable earlier, in a deeply controlled economy business cyclical fluctuations could not occur secondly, there is a mismatch between the real (goods) part of the economy and the money part of the economy. This dichotomy needs to be bridged. Banks are flushed with money. But inventories are piling up. This is a temporary phenomenon and hopefully, the same Mr Chidambaram can rectify the situation through measures just taken by the RBI.

mog! (Fri Nov 1 21:45:10 1996 IST):

Bobby (Fri Nov 1 21:47:16 1996 IST):

Dr Mitra, is India's economy so advanced that it has to go through the business cycle routine? Was not the present slowdown caused by the liquidity crunch imposed, and the government expenditure which stayed high? Deve Gowda is still announcing subsidies? Is not THAT the cause of the approaching recession?

Bobby (Fri Nov 1 21:49:47 1996 IST):

What is FICCI doing to create Indian multinationals? And when will we see them

Dr. Amit Mitra (Fri Nov 1 21:51:00 1996 IST):

Bobby: FICCI strentghs, among others, are in the following: 1) We are the only chamber perhaps in the entire developing world with on line business data network-- Bisnet. It contains invaluable data and every policy notification of the GoI updated rround the clock. 2) We have a match making body for foreign investment called Fitpo which has made numerous matches the latest being micro tunneling technology from Germany to Indina Oil Corporation. 3) WE have a unique quality froum which has recieved a million dollar ground from Norway to improve the quality standards of 35 small industries -- project completed. 4) In depth policy research in 26 areas has given FICCI the inside track to government policy which is now demanding knowledge which FICCI is in a position to offer.

Hetal Shah (Fri Nov 1 21:53:43 1996 IST):

Thanks for a great chat, and for your answers, Dr Mitra, but I got to go now. See you soon again.

Dr. Amit Mitra (Fri Nov 1 21:53:54 1996 IST):


REDIFF ON THE NET (Fri Nov 1 21:56:03 1996 IST):

Thank You, Dr Amit Mitra, and FICCI, for a most enlightening chat. Please remember, we have Mr Kersi Chavda, Mr Mohindar Amarnath, and Mr Rahul Bajaj coming up soon. Thanks and good night.

Sumnesh (Fri Nov 1 22:05:58 1996 IST):

Dear Mr.Mitra, I am a graduate student in the US and as I was researching on the sub:" Era after 1990 ", I found out that FICCI or CII are not doing their part as forcely as they should be. Deregulation process started by Rao has been halted by the New govt. It is still not easy for an NRI to start a new business in India. I just wanna know what FICCI is doing to keep the process of liberalisation rolling in the right direction ?

Sumnesh (Fri Nov 1 22:08:04 1996 IST):

Hey Killer Are you still there ? Wanna chat ?

Sumnesh (Fri Nov 1 22:08:04 1996 IST):

Hey Killer Are you still there ? Wanna chat ?

Photographs: Atul Chowdhary