Ramakrishna Wants Core Sector Subsidy To Go

Disinvestment Commission chairman G V Ramakrishna yesterday said subsidies in the infrastructure sectors, particularly in power and transport, should be removed.

Calling for levy of user charges, he told a seminar that infrastructure in India is subsidised and substandard. It is subsidised because it is substandard, and substandard because it is subsidised.

He asserted that the policy of subsidisation affected the viable functioning of any infrastrucural enterprise, which heavily depended on equity and credit, but could not provide them adequate and assured returns.

We must educate people on the need for infrastructure and what it takes to get it, he said calling for a conducive policy framework to price infrastructure properly.

Besides a stable policy

environment, there was also need for bringing about transparent contracting procedures, observing the sanctity of contracts, putting in place a strong regulatory mechanism and statutory regulations, he added.

The liberalisation process entailed formation of a strong regulatory body in order to encourage competition and ensure level playing field to all participants, he said addressing the seminar on Infrastructure in Tamil Nadu here. Ramakrishna said influx of private and foreign capital was crucial to achieve rapid improvement in infrastructure, but stressed the need for taking people along while formulating privatisation policies. Noting the shift of power

from conservatives to socialists in France, Ramakrrishna said the main reason for this development was the historically unprecedented 12 per cent rate of unemployment in that country.

Political stability is crucial to achieve implementation of the reform programme. If the leaders were destabilised, the programme itself may be destabilised, the Divestment Commission chairman said.

Frank G Wisner, who presented the keynote address at the meet, lauded Tamil Nadu for showing encouraging signs of a state that is not just talking about infrastructure development, but doing something about it. He said several American companies had either already invested in the state or were keen to participate in its infrastructure development programme.

As cases in point he said that CMS Energy was putting up the zero unit power plant at Neyveli, Raytheon had taken up the Tuticorin port expansion project, Enron had successfully bid for a power project and United Technologies was linking up with Aben Lloyd.

while Tata and Tennessee Valley had also joined hands.