Hasten reforms drive to boost industry performance: experts

Monday, 25 November 2002, 08:00 Hrs   |    3 Comments
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NEW DELHI: India's piecemeal reforms drive must be put on the fifth gear at the earliest to increase overseas investment and make the domestic industry internationally competitive, experts said Sunday.

Speaking at the inaugural session of the 18th India Economic Summit 2002, global industry captains and analysts urged the Indian government to increase the momentum of the ongoing liberalisation process to achieve higher economic growth.

The three-day summit, which started here Sunday, is being organised jointly by the Confederation of Indian Industry (CII) and the World Economic Forum (WEF).

"The biggest challenge for India is to see that all companies, both from the new and old economy sector, become internationally competitive," said Rahul Bajaj, chairman and managing director of two-wheeler major Bajaj Auto.

"For this, we need to accelerate the second generation reforms, improve infrastructure, introduce flexible labour policy and ensure that there is less red tape and less corruption," Bajaj told the summit.

Over 400 business leaders from 25 countries will be participating in the India Economic Summit, along with a number of ministerial and senior government officials.

The WEF and CII have been jointly organising the summit annually for the last 17 years to take stock of the progress and developments on the social and economic fronts in India.

Bajaj said that the government must introduce sweeping economic reforms at a faster pace to help the country achieve the target of eight percent gross domestic product (GDP) growth over the next few years.

Economists say Indian economy must grow at a rate of eight percent for four to five years to make a significant dent on poverty.

India's economy grew by a meagre four percent in the year ended March 31, 2001, compared to the 6.1-percent growth logged a year earlier.

Foreign investment in India increased by 65 percent to $4.06 billion in the fiscal year that ended in March.

The Indian government has an annual target of $10 billion for foreign direct investment, but has received only about $3 billion for the past few years.

"All of us have to agree on certain economic programmes -- whether it is disinvestment, flexible labour policy or opening up the market for foreign investment," said N.R. Narayana Murthy, chairman of Infosys Technologies.

"If we don't do it quickly, the food will be taken away from our plate".

Lord Charles Powell of Bayswater, chairman of Britain-based Sagitta Asset Management, said foreign investment in India is being badly affected because the country is not "fully open" to business.

"China had embraced globalisation far more readily than India has done and that is a major disadvantage," Powell said, adding India can achieve sharply higher growth rate by opening up the market and capitalising on "natural advantages."

"If you push the privatisation programme vigorously and free labour market, you can reach the magic figure of eight percent growth and you can also greatly increase India's standing in the world," he told the corporate chiefs and policy makers.

John Rutherford Jr, president and chief executive officer of Moody's Corporation, said that the government needed to make huge investment in education and infrastructure to boost the economy.
Source: IANS
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