The Hindu Business Line : Will Sinha's fifth reverse the slide?

INDUSTRY hopes that the key issues of public investment and industrial reforms raised in the Economic Survey will be answered when the Union Finance Minister, Mr Yashwant Sinha, unveils his fifth Budget on February 28.

In the meanwhile, in order to control Government expenditure, the President of Confederation of Indian Industry (CII), Mr Sanjiv Goenka, on Tuesday stressed the need for early enactment of the Fiscal Responsibility Bill, which will put a ceiling on fiscal and revenue deficit.

Commenting on the Economic Survey 2001-02, Mr Goenka said that in the backdrop of the declining trend in industrial production as shown by the Survey, there was a need to stimulate investment for growth in the economy.

He hoped that the forthcoming Union Budget would contain measures to enhance growth.

According to Mr Goenka, the key to reducing the Government's fiscal deficit lies in enhancing growth in industry and manufacturing, as higher growth rates would lead to greater buoyancy in tax revenues.

The President of the Federation of Indian Chambers of Commerce and Industry (FICCI), Mr R.S. Lodha, said that the Economic Survey underscores the clutch of reforms necessary to achieve the 10th Plan objective of eight per cent growth rate.

The chamber has also welcomed the Survey's perceptions on the high real interest rates and the dereservation of the small-scale sector.

Further, it said that the Survey has called for a proactive restructuring policy to address the issue of corporate debt restructuring.

"There are two clear negative signals highlighted in the Survey. Both domestic production and import of capital goods have declined considerably in the current year, illustrating that there has been less demand for capital goods. The same can be judged from the sanctions and disbursements of all Indian financial institutions, which according to the Survey have come down significantly. This may adversely affect the industrial growth rate in the coming fiscal as well,'' Mr Lodha said.

Commenting on the roadmap outlined by the survey, Mr K.K. Nohria, President of the Associated Chambers of Commerce and Industry of India (Assocham), said that the financial health of the States was a cause for worry and was becoming a stumbling block in actualising public investments.

Therefore, there is a need for an evolving mechanism for implementing infrastructure projects, he added.

Welcoming the emphasis on rural infrastructure, the chamber said that it would be worthwhile to give a fillip to the public-private partnership by way of `food for work' programme.

Send this article to Friends by E-Mail

Stories in this Section
Cut deficit, lift growth: Survey

Economic Survey 2001-02

A strong case for revamp of tax administration

Shift in agri policy recommended

Will Sinha's fifth reverse the slide?

Bank funding for cos may dry up

Interest rate on small savings may be cut

A silver lining for tourism sector

Govt in no hurry to relax capital controls

Survey clear about core concerns

10 PSUs to be divested by March