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April 28, 1998

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PMO to monitor economic growth

Amberish K Diwanji in Delhi

The implementation of all projects worth Rs 1 billion or more will be directly monitored by the prime minister's office as part of the government's effort to ensure speedy implementation and kickstart the economy.

Prime Minister Atal Bihari Vajpayee revealed his gameplan at the Confederation of Indian Industry's annual general session that addressed the theme: 'Bringing Growth Back: Economy, Education, Employment.'

Speaking forcefully to a packed hall (many delegates and journalists sat in the aisles as the seats proved insufficient), the prime minister outlined his vision to ensure that growth returned to 7 to 8 per cent of GDP. "Even that is not enough," he added, "because at that rate we will need 50 years to catch up with the developed world. Therefore, we should look at greater growth."

The prime minister called for a mindset revolution to harmonise economic liberalisation with social liberation. Growth was needed, he said, to achieve an India free of poverty, illiteracy and disease. He added that India's very existence as a nation depended on growth and ensuring social equity.

Vajpayee strongly advocated divorcing politics from economics. "The problems facing India are too complex for a partisan approach," he said, adding that the first phase of reforms failed because it did not work on ending unemployment, eradicating illiteracy, and other social problems. It also lacked checks and balances and failed to build infrastructure, which was the cause for the present economic slowdown.

Stating that the present need was to reform the reforms, he listed the various complaints that sections of society have against one and another. He said industry's complaint was that government was the cause of delays, that government takes too much and gives too little, and that the government is in businesses where it has no business at all.

The prime minister then enumerated the complaints the government had against industry: the latter did not share in the social objectives burden; that while the industry sought transparency and a corruption-free zone, it did little towards that end; and that industry wanted competition in other industries. The last, a reference to the demand for protection by some of India's biggest corporates, drew a titter from the audience.

Vajpayee then listed the common perception of both industry and the government: both are hand in glove to make money, neither care for the people, and that are separate rules for the common people and for the privileged.

The prime minister lamented that nothing was being done to correct these misconceptions. He promised that his government would be a helper, not a hurdle, to industry and referred to Sunday's policy announcements made by Power Minister P R Kumaramangalam in this regard.

Vajpayee then went on to list the various steps he planned to undertake in the next three months to improve the economy and put it on the higher growth path:

Funds from idle sources would be remobilised;

Liberalisation will be broadened, deepened and speeded up, but globalisation would be adopted carefully;

The Foreign Exchange Regulation Act would be replaced with a current legislation;

The thrust would be on infrastructure to push up growth and increase employment;

The PMO would directly see that projects were implemented without delay;

Substantial funds would be earmarked for agriculture with the aim of creating a hunger-free India by 2010;

Importance would be given to the small-scale industry since that sector generated employment;

A national housing policy would be announced within 60 days, a sector that also generated employment;

Information technology is one area that can make India a superpower and in the next 30 days, a national information technology task force would be set up;

The public sector will be reformed, including transparent disinvestment;

Competitiveness must be improved, especially while seeking exports; and,

Swadeshi does not mean that foreign investment is not valued, it only means that the bulk of the resources needed for development will have to be mobilised from within. Towards that end, steps will be take to raise savings from the present 26 per cent of GDP to 30 per cent of GDP.

The prime minister's speech was heard in rapt silence, and he received a standing ovation.

In contrast, Sonia Gandhi, in her maiden speech to captains of industry, sounded almost like a school teacher. In the style that has come to symbolise her, she began by recalling how her late husband, Rajiv Gandhi, had inaugurated a CII session a few days after assuming office as prime minister.

Bajaj Auto Chairman Rahul Bajaj, who, say, sources, was instrumental in roping Sonia to address the session, began by recalling the long association between his and the Nehru families. He pointed out that he had been named Rahul by Jawaharlal Nehru, a name that was meant for Rajiv, simply because he was born first!

Sonia began by referring to "my husband" Rajiv's herculean efforts in preparing the draft policy on education. He stayed awake for nights on end to formulate a policy to provide quality education to the children of India, she said.

She stayed off politics, only referring to the fact that the Congress regime did not ignore employment in the rush for liberalisation. She asked the government to increase the outlay for education to 5 per cent of GDP from the present 3.8 per cent.

Touching upon the themes that the Congress has identified as stepping stones for its return to power, she spoke of making the necessary arrangements for the Dalits, adivasis and the minorities. She asked that the Khadi and Village Industries Commission be modernised for the present age.

Former prime minister I K Gujral, who was the last speaker during the morning session, lived up to his reputation of being more a foreign minister than prime minister. In his long speech, he spoke mostly on foreign affairs, ignoring the themes of economy, education, and employment. His rejoinder: "Industry is more aware than I of what needs to be done in these sectors."

Gujral insisted that the Ghauri was not a threat to India and assured those present that "India was more than a match for Pakistan's missile programme."

"I am telling you not to worry about any Pakistan missile or bomb," he said emphatically.

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