Business says govt slow to respond to its problems

Juxtaposed to the Uttar Pradesh government’s efforts to promote ‘Brand UP’ and woo private investors, the Business Standard Round-Table on ‘Uttar Pradesh: The Development Agenda’, held here on September 25, gave a platform for industry and government to discuss related issues.

There was general agreement that good politics could be good economics too, as exemplified by states like Gujarat and, recently, Bihar. What was needed was the continuity of reforms as in Western countries, where the fundamental premises of economic policies do not alter with a change of guard.

Mirza International Chairman Irshad Mirza noted that although the textile and leather sector provided the highest number of jobs in the state and earned handsome foreign exchange, they were a neglected lot. He minced no words that the complex tax structure and apathetic officials only served as dampeners to businessmen.

“It is the government’s duty to create infrastructure and not solely depend on Public Private Partnership (PPP) models. Besides, a single-window clearance system in approving projects is the call of the hour,” he stressed.

Another panelist, World Bank consultant and Lucknow University professor Arvind Mohan, raised the issue of small and medium enterprises needing government support for growth.

“The 1991 reforms favoured big industries. Today, we need a second generation of reforms, both in rural and human development parameters. UP already has the talent pool available, the question is how to energise it,” he said. Adding that the economic slowdown was an opportunity, as while demand was contracting elsewhere, that in UP was stable, even growing.

“UP alone has 12 per cent purchasing power and if we add the markets of the neighbouring states, the combined purchasing power becomes 65 per cent, which is massive,” he explained.

Participating in the open session discussions, KM Sugar Mills chairman L K Jhunjhunwala stressed on developing power infrastructure in the state and formulating enabling economic policies for the private sector. He demanded the state power utility offer more lucrative prices to sugar mills when it buys co-generated electricity from them. The government pays only Rs 1.82 per unit for co-generated power, while due to shortage of coal, even brick kilns were now giving much better prices for bagasse, which is also used for paper manufacturing.

CII’s state council vice-president and UP head of Tata Consultancy Services, Jayant Krishna, said the state government needed to work hard to get five-six flagship anchor investors. “States are now competing with each other in attracting investors and the state of UP has to show the hunger for investment. The single-window clearance system must ensure at least 80 per cent of proposals are cleared that way,” he maintained.

Industry representatives also complained they had no representation on policy-making bodies or government organisations mandated to usher in industrial development, such as UP State Industrial Development Corporation (UPSIDC). They urged the government to give more teeth to the industry interface, Udyog Bandhu.

UP Hosiery Manufacturers Association patron Balram Narula lamented that in the current financial year, the trade tax department had hiked the revenue target by 92 per cent. “In the present spate of slowdown, the officials are resorting to harassing businessmen to achieve their targets,” he added.

With the severe power crisis in the state, the hosiery sector was badly affected, said Narula.

Assocham secretary-general S B Agarwal raised the issue of rehabilitation of sick units in the state. He claimed banks had identified about 17,500 sick Micro, Small and Medium Enterprises (MSME) units in the state, of which only 12 per cent were deemed fit for rehabilitation.

“Of these 12 per cent, only 319 units were put on the rehabilitation track, which shows that the banks were only concerned about the safety of their loan and not the projects,” he said.

Assocham vice president Shailendra Jain urged the state government agencies and departments to develop a more positive and respectful attitude towards the business community and not to treat them as serial offenders.