A Mixed Bag, Says Industry

Industry yesterday reacted with mixed feelings to the manifesto, with one section welcoming it while another section expressed scepticism.

According to a senior corporate executive, All political parties come up with manifestos that are never meant to be implemented. When they come to power, the same people do not practise what they promise. We feel that the measure to restrict foreign direct investment is not welcome. We should not impose artificial restrictions because the foreign investors always have the option of putting their funds elsewhere. While protecting the local industry, there is a need to balance consumers interests and the need for protection.

 

A senior official of a leading multinational in the infrastructure sector welcomed the manifesto. The BJP declaration that multinationals in non-priority sector should come in via the joint venture route is correct.Multinationals should promote the joint venture and its employees. Ultimately Indians and not expatriates should head such ventures, he added.

A senior executive of Honda Motors Indian subsidiary said, It is expected for a political party to raise certain nationalist issues. It is done everywhere. But since the country will have to inevitably move towards a global economy in the light of WTO, what is essential is that there be a right balance between national issues and international agenda.

However, since this is a pre-election statement, it is too early to evaluate, we have to see how these are finally effected if the party comes to power, he said.

BM Park, managing director Samsung India Electronics Ltd, said, Probably in specific areas where the manifesto is anti-MNC, the foreign investor might rethink. But, in general the concern is more on the general business environment- on macro-issues, and on the state of infrastructure. If there is a stable government, then it will do more to attract the foreign investor. If economic fundamentals of India remain strong, then the manifesto might not have a negative effect.

Arun Bharat Ram, SRF chairman, said the manifesto talks of framing policies to restrict foreign entry in those areas where domestic industry is faring well. But I do not know what will be those polices and how they are planning to implement them. I cannot really comment before I read or know their intentions fully.

The CEO of a leading MNC software firm, which has recently set up a R&D facility in the country, commented that the clause that FDI is more preferable through the JV route instead of MNCs setting up wholly owned subsidiaries has two aspects to it. MNC companies in the infotech sector, especially those engaged only in selling their products in India, would not find it alarming.

But the business model for companies, especially the MNC software development firms that wish to engage in development of `intellectual property out of India for the global market, does not allow JVs.

These companies would like to have full and complete control of the operations in the country, and therefore have reason to be unhappy, he said.

THE ROAD AHEAD

Telecom:

l Corporatise DoT and christen it as India Telecom. Government to divest stake in India Telecom at the "appropriate time"

l Discourage foreign majority in telecom companies

l Indian Telegraph Act, 1885 to be replaced with new legislation

l Strengthen TRAI

l Increase number of phone lines dramatically, especially in villages

l Encourage domestic telecom manufacturing

Power:

l The Central Electricity Authority (CEA) and Central Water Commision to be stripped of statutory powers and converted into consultancy organisations; no role in project clearance.

l Review the liquid fuel policy and institute a more efficient and fair policy regime

l Investors in power transmission would have clearer guidelines as compared to those in generation

l Private sector entry to be allowed in coal mining

l Preference to Indian companies investing in generation and distribution

l All fast track power projects to commence construction in 1998

Ports & Roads

l Separate National Highway Development Corporation to be set up construction of highway projects.

l Portion of taxes on motor vehicles and on petrol, deisel to be handed over to the city, town for upgrading of roads.

l Ports to be converted into companies.

l Mumbai and Vizag to be developed as mega-ports.

l Preference for Indian companies for setting up ports.

Plan Investment

l Target GDP growth at 8-9 per cent

l Complete review of ninth plan.

l Ninth plan to have employment generation as centre piece. Promise of 10 crore new jobs in next ten years

l Double allocation for agriculture and rural development to 60 per cent of plan resources