Union industry minister Murasoli Maran yesterday described the current economic liberalisation process as reforms by consensus and reiterated that they were irreversible and unstoppable.
Maran, who was inaugurating the two-day International Investment & Technology Conference organised here by the Andhra Pradesh government, however, clarified that the reforms are not a return to laissez-faire and that they merely seek to shift the government from a counter-productive role to productive intervention and indication.
He said the current arguments on the reforms have more to do with mechanisms, timing, acceptability and political sustainability rather than on their very need.
Emphasising that are several economic spheres where the government can play a key role, Maran pointed out that it was only recently that the government had realised that India has failed to spread primary education and raise literacy to a level anywhere near that achieved by several countries.
Investment in the social sectors deserves serious attention, he noted .
The minister said the reforms have created a situation where the states must play a major role in attracting investment.
The race among states to attract foreign direct investment is a welcome development, he said.
Maran said foreign direct investment is essential to sustain a GDP growth rate of 7 per cent a year and to combat poverty.
The goal of increasing the domestic savings rate to 26.2 per cent in the ninth five-year plan from 24 per cent in the eighth plan cannot be achieved without FDI, he added.
Noting that simplicity, speed, transparency and fairness are the four tenets on which the governments FDI policy is based, Maran said that between July and December 1996, the government had cleared 899 proposals involving a total investment of $7 billion (Rs 24,000 crore) through the revamped Foreign Investment Promotion Board (FIPB).
He assured the delegates that the government would safeguard domestic industries, but added that it would like them to become internationally competitive, self sustaining and vibrant.
A diversified and mature domestic industrial infrastructure could gain from international investment and technology transfers, he explained.
Maran referred to the various initiatives taken by Andhra Pradesh to attract investment and pointed to the vast economic and social infrastructure it has built up.
While Andhra Pradesh stands fifth in terms of total investment proposals in the post-reform period up to May 1996 , it is the tenth preferred destination for FDI among approved cases - that indicates the location of the proposed venture.
The state government should, therefore, take another look at the performance indicators and prepare a master plan to target larger volumes of investment.
The State Government should encourage the development of industrial clusters, improve the effectiveness of sub-contracting and ancillary industries, raise the efficiency of state public sector undertakings (PSUs) and build industrial corridors along the lines of those in the high performing Asian countries - so that maximum growth can be achieved, he said.
Maran referred to the complementary and supplementary status of the Dravida Munnetra Khazagam (DMK) and the Telugu Desam Party (TDP) and opined that the days of single-party rule at the Union level are over.
Some of the so-called national parties are getting reduced to regional parties while several regional parties becoming more attuned to national level issues, he added.
Andhra Pradesh Chief Minister N Chandrababu Naidu, in an electronic presentation, explained the vast potential Andhra Pradesh offered to prospective investors.
Confederation of Indian Industry (CII) vice-president N Kumar expressed the hope that the conference would result in spot decisions on major investment decisions.
In his welcome address, principal secretary P C Parakh explained the incentives offered by the Andhra Pradesh government to lure investors.
Among the delegates attending the conference are representatives from seven embassies in the capital.
