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Mr N.K.Singh, Planning Commission Member, with Mr Tarun Das, Director-General, CII, at a valedictory session on Manufacturing Summit held in Mumbai on Thursday.

MUMBAI, Oct. 24

FOR Indian manufacturers, the Manufacturing Summit, 2002, was a time to dispel myths and put forward demands. The industry would, according to a 7-point agenda in the CII-McKinsey report unveiled on Wednesday here, have greater chances of revival if the Government reduced indirect taxes and excise rates, accelerated labour reforms and lower interest rates, among others.

However, according to Mr N.K. Singh, Member, Planning Commission, passing important legislations like the Convergence Bill, Electricity Bill, and legislation relating to civil aviation, port management and financial services, pending for the last 12-18 months, was essential to pump energy into the Indian economy.

Further, there needed to be a concerted move to reduce Government equity in financial services to 33 per cent, significantly lower the cost of financial intermediation, and deregulate the power sector to allow private players to participate in distribution.

Speaking at the summit organised by the CII, Mr Singh said: "It is important to bring out a degree of political convergence on the passage of economic legislation in Parliament." He agreed with most of the CII delegates that there was a long way to go in terms of labour, education, social sector and infrastructure reforms.

"We have taken note of the fact that money is not enough, but performance is important too," adding that the key to the allocation of budgets was not entitlement but improved performance. Eleven States had signed an accord with the Ministry of Power to be a part of the Accelerated Power Development and Reform Fund and seven others had shown interest. This would involve distribution circles being earmarked, energy audits, unbundling of energy board and ending transmission and distribution losses. In fact, three States were rethinking their policies on providing free power to agriculture.

A sum of Rs 10,000 crore had been sanctioned to the corpus and Rs 2,500 crore in incentives provided to ensure qualitative improvements in the financial health of electricity boards.

Mr Singh added that there needed to be greater Government-industry partnership on research and development.

For this, "there should be a large corpus of funds to promote R&D for Indian industry as a whole and it should be willing to support such a fund to raise levels of production and skills."

On the CII-McKinsey report, Mr Singh cautioned that the Chinese example needed to be a learning experience and not mechanically replicated as China's economic model had a number of constraints.

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