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Industry gets ready for FM's meet

By Suveen K Sinha in New Delhi
June 19, 2006 12:38 IST
The finance minister's meeting with industry to remove obstacles in the way of 12 per cent manufacturing growth is likely to finally take place on June 28.

The meeting was first planned for May 1, two months after the Budget, as declared by the finance minister when he met the industry the day after the Budget.

However, he had wanted the apex industry associations to submit their recommendations two weeks before the meeting, which they failed to do.

The chambers had recently submitted their recommendations. Thus, the decks have been cleared for the meeting, which, industry sources said, had been tentatively scheduled for June 28.

The meeting is in response to the industry's clamour that this year's Budget lacked a strong reforms thrust. It is also a signal that policy-making could become a rolling process, one not confined to the Budget.

"Please take two months and let us meet again on May 1... All chambers can make a list of what stands between you and 12 per cent manufacturing growth and we shall address them. Likewise for the services sector," Chidambaram had said the day after the Budget.

Federation of Indian Chambers of Commerce & Industry, in its presentation, has presented a 10-point agenda that calls for reduction in the revenue deficit to release resources for accelerating public investment; an export-import policy that uses drawback rates to neutralise the impact of taxes on goods and services; creation of world-class infrastructure and provision of cheap and assured power; a flexible labour policy; a regulatory reform that benchmarks entry and exit time and costs for investors in manufacturing with global levels; financial and mining sector reforms; fillip to small and medium enterprises; and investments in modernisation and expansion of vocational and technical training, and thrust on research and development through long-term tax-breaks.

The Confederation of Indian Industry has not officially circulated its recommendations. However, it is believed to have suggested, among other things, structural reforms in the energy and mining sectors.

It has called for the following: an Energy Commission for developing and implementing an integrated energy policy; a competitive and vibrant wholesale power market by implementing multiple measures spanning the entire electricity value chain and stronger incentives for states that expedite reform; increase in Central Electricity Regulatory Commission's mandate over state electricity regulatory commissions.

It has also asked for substantial private and merchant participation in mining; clear criteria for lease allocation to rapidly increase competition; increase in royalties and changes in the basis of royalty payments to states; and removal of hurdles to obtain approvals and establishment of an independent mining regulator.

Suveen K Sinha in New Delhi
Source: source