The Hindu : Govt.-industry meeting to step up investment

Online edition of India's National Newspaper
Tuesday, Jan 07, 2003

Business

Business

Govt.-industry meeting to step up investment

By Our Special Correspondent

NEW DELHI JAN. 6. The Government today held talks with industry chambers to discuss ways to step up investment and remove bottlenecks impeding the investment climate. The meeting, convened by Commerce and Industry Minister, Arun Shourie, was attended by representatives of the Confederation of Indian Industry (CII), the Federation of Indian Chambers of Commerce and Industry (FICCI) and the Associated Chambers of Commerce and Industry (Assocham).

Though not strictly speaking a pre-budget meeting, many of the concerns raised by industry representatives fell within the purview of the Finance Ministry and are likely to be forwarded for its consideration. Among the issues discussed at the meeting were lowering of interest rates as well as anomalies in the duty structure. Industry representatives also expressed concern over the high level of taxation as a percentage of production in this country. It was pointed out that in other countries such as Malaysia, the duty on cement for instance was zero per cent while in China it was 17 per cent. In contrast, the duty on cement was 60 per cent in India.

The meeting also highlighted the need to tap new sources of funds such as pension funds to finance infrastructure projects. Industry representatives noted, however, that unless user charges were strictly enforced, infrastructure projects would become unviable and funds pumped into these projects would become non-performing assets.

As for the huge foreign exchange reserves accumulated this year, the meeting noted that most of the inflow of $22 billion this year was due to higher interest rates available in this country. At the same time, there was a feeling that foreign exchange reserves should be put to better use by either helping the Indian companies acquire companies abroad or in creating and marketing of a "made in India'' brand.

The meeting, which welcomed legal provisions such as the securitisation laws, felt the limitations in these provisions would have to be tackled. It was pointed out, for instance, if seizure of assets has to be limited to wilful defaulters, there is a possibility of a discretion being exercised in litigation proceedings. Similarly, if the bank took over the assets, there was a possibility of the property falling back into the defaulters hands in case of a decision by the bank to sell the property.

Printer friendly page
Send this article to Friends by E-Mail

Business