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CII opposes bias against foreign firms

Syed Firdaus Ashraf in Bombay

"Swadeshi means that Indian companies should compete globally with foreign companies on equal terms. Foreign companies should not be discriminated against vis-a-vis the Indian companies." Rajesh V Shah, newly-elected president of the Confederation of Indian Industry, declared at a press conference in Bombay today.

Interestingly, only yesterday, on taking over as CII president, had Shah called upon the government to impose an additional five per cent import duty to help Indian industry cope with international products, particularly after the Southeast Asian currencies devaluation.

However, the CII president had also stated that the increase in customs duty should be for a short term only.

In Bombay today, Shah -- BJP MP Viren Shah's elder son -- dismissed the Swadeshi Jagran Manch. "No matter what the Manch says about economic policies, we are more concerned about Prime Minister A B Vajpayee's assurance to CII that his government will reform the reform process," stated Shah, "The prime minister has also informed the CII that his government will follow the economic policies of national agenda which was set up by the 18-party coalition government at the Centre."

The SJM is an organisation strongly opposed to the presence of multinational companies in India. Like the BJP, the Manch is also affiliated to the Rashtriya Swayamsevak Sangh.

Shah -- managing director, Mukand Iron & Steel -- suggested sweeping reforms in 15 key areas of the economy that would lead to higher growth rates in various sectors and a massive increase in foreign direct investment into the economy.

The CII has also suggested initiatives in the areas of governance, population control, information technology, and in creating jobs.

The last factor was stressed by new CII vice-president Vijay Kirloskar. "Changes in technology have brought about a need for more jobs in services and the technology sector, and I feel these are the key areas in which our country should concentrate on," he said, adding, "In my opinion, computer software exports will be one of the main source of foreign earnings in the near future."

Commenting on the much debated insurance sector, Shah said, "I feel that the insurance sector must be opened up to both private as well as foreign investors. However, foreigners should be allowed with an initial stake of only 20 per cent in the private companies."

For fiscal 1998-99, the CII has targeted a growth rate of seven per cent of GDP which would encompass 2.5 per cent in agriculture, nine per cent in industry, eight per cent in services, 15 per cent in exports, and 17 per cent in imports.

Besides, the apex industry chamber has set a target of US $5 billion in foreign direct investment, a saving/GDP ratio of 28 per cent, and foreign exchange reserves of US $30 billion. Shah called for increase in capital expenditure on infrastructure from 5.5 per cent to 7 to 8 per cent of GDP.

Shah insisted on the creation of a department of international trade, headed by a minister of state and answerable to the prime minister and commerce minister directly.

He also announced the setting up of a national technology council to be headed by scientific advisor to the defence minister, Dr A P J Abdul Kalam. He added that Andhra Pradesh Chief Minister N Chandrababu Naidu will head the national council on information technology, to be set up shortly.

Commenting on small-scale industries, Shah stated that the upper level of turnover be retained at Rs 30 million, and added that if the government wanted to reduce the level, then such a decision should be taken after consultations between the industry ministry and small-scale units.

The CII president felt that public sector units should not exist in in loss-making sectors like tractors, hotels, and watches. Such units should be auctioned, he said.

The CII president asked government to set up a national export council, grant autonomy to Exim Bank, revamp the Export Credit Guarantee Corporation, and leverage bulk imports.

He urged the building of an 'India Brand' by creating a corpus of Rs 5 billion.

Shah also stressed establishing a national organisation to lead India's multilateral trade activities, and announced that CII would establish an office in Geneva.