Cii Chief Suggests Hardsell For States

Confederation of Indian Industries president N Kumar yesterday emphasised the importance of creating hype about the investment potential of a state.

He said that a state like West Bengal had tremendous potential. But because of negative investor perceptions, the state was losing out on its fair share of the national investment pie.

Talking to Business Standard on his maiden visit to Calcutta after taking over as the chambers president, he said that the state enjoys one of the most stable and best governments in the country. He also said the government was working hard towards improving investor perceptions about the state.

 

Kumar said though Chennai is still the largest exporter of software in the country, as far as investor perceptions are concerned, Bangalore is the software capital of the country. As a result, he points out, whenever any foreign software concern thinks of investing in India, the first place that comes to mind is Bangalore.

This is the kind of hype I am talking about and the kind of hype which West Bengal needs, he said, adding that the state government was working hard towards achieving this goal.

Earlier, Kumar emphasised the importance of infrastructure, law and order, information technology, human resource development and judicial and administrative reforms in taking the country and its industry closer to global competitive standards.

He reitireated that infrastructure was the locomotive of the Indian economy and there is a pressing need to establish strong regulatory control over the economy. He pointed out that only in the case of the telecom sector was a regulatory authority in the form of Telecom Regulatory Authority of India (TRAI) existed. A similar body is needed for sectors like power, ports, roads and waterways, Kumar said. Further, greater transparancy and a mechanism for coordination between these bodies and between the central and state governments was also sorely needed.

Kumar also pointed out that the law and order situation in many parts of the country, including the capital, New Delhi, left much to be desired and that it could well become an important deterrant to new investment.The new CII president stressed upon the need to build an IT culture in the country in general and especially in the government so as to facilitate faster access to data and speedier decision making.

Pointing out the role of human resource development in taking the economy to a more competitive plane, Kumar emphasised the need for making primary education universal and for educating the countrys large workforce.

Emphasising the need to face up to the challenges of liberalisation, the CII president pointed out that the need of the hour was becoming more competitive. CII was, according to Kumar, placing great importance to new initiatives in the areas of benchmarking, brand building and improved technology. He reitirated the necessity of promoting and building Indian brands abroad and of benchmarking to bring Indian products up to world class standards in performance and quality.

The Confederation of Indian Industry (CII) has urged the Union government to adopt the Foreign Exchange Management Act (Fema) fast and without retrospective effect.

Kumar said, Fema should come fast as all other laws, like the Companies Act, which were undergoing changes. It should, however, not come with retrospective effect, he added.

Corporate analysts say that CIIs stand on Fema might send shock waves to many of its members, particularly the ITC. They said it was so because had Fema been introduced with retrospective effect, charges against ITC, a major Foreign Exchange Regulation Act (Fera) violator, would have to be dropped.

The corporate observers also maintained that ITC would have to fight it out alone, without the CII plank, to impress upon the government to push through Fema with retrospective effect.

The CII president mentioned that if government brought about capital account convertibility, then there would be no capital flight, as feared by many.

Kumar also urged the government to address some national agenda items which included law and order, human capital development, development of a national I-T culture and continuing judicial reforms.