Govt should take hard decisions: FICCI | business | Hindustan Times
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Govt should take hard decisions: FICCI

Government should reflect a political will and clear policies to set right things and enthuse investment.

business Updated: Jan 04, 2006 14:38 IST

Decrying the opposition to economic pricing of petroleum products, power and fertilisers in the Indian polity, apex industry association FICCI today said the government should reflect a political will and clear policies to set right things and enthuse investment.

"Today, fertilisers are priced lower than the raw material. Every time there is a price hike in urea, every government has rolled it back," newly elected FICCI President Saroj Poddar said even though he complimented Prime Minister Manmohan Singh for "doing reasonably well given the political situation and reality of UPA (coalition)."

Citing the case of under-pricing of power in states (by almost all political parties) due to political considerations and distortions in petro-product prices, Poddar said the government should not hesitate in taking a decision on economic pricing of all products and services.

"We need investment of over 150 billion dollars. Money is not a problem and we can get it. All that is needed is right framework, clear policies and political will," he emphasised.

"Given the political situation and realities, the Manmohan Singh government has done well. Priorities set by the UPA Government are all correct but they must move to the next stage of implementation and action," Poddar said.

"Credibility of the government is very high... (although) Lot of things could have been done much faster but for political circumstances," he said while admitting that timing of implementation of government decisions and policies may change due to elections in state.

"Unlike China's, India's manufacturing sector is domestic driven, we need to augment the capacity. The growth rate in the industry should increase to 12-14 per cent against the current level of around 9 per cent," he said.

This would necessitate a better and coordinated approach between the centre and states while pointing out the weakness in power sector. Despite the necessary legislation, power is not priced realistically and economically.

Poddar said that government should initially freeze the subsidies at the current level in budget and then resort for annual increase of 2-3 per cent in prices of petro products, fertilisers and power till a realistic level is attained.

Thereafter, the issue of subsidy could be addressed, he said, adding that government should not always talk of measures to check and reduce subsidy till economic prices become a reality.

On allowing FDI in retail sector, Poddar said: "FDI in retail of food and agriculture sector should be permitted as it will help Indian farmers."

Asked to comment on the Left parties' opposition to the issue, he said: "I believe Left will be sympathetic to FDI in retail on agriculture and farm products. Opening up of the retail of food and agri sectors for FDI will be in the interest of the Indian farmers".

There is no significant difference between the Left and the UPA Government on FDI in retail, "just that the concept of retail is confused".

The chamber was hopeful of a consensus between the UPA Government and the Left parties on the issue.

Commenting on the contentious issue of reservation in non-aided private educational institutions, Poddar said: "We do not believe it is a good decision. The move is more in line with the political needs".

Even on job reservation in private sector, he said: "You can't make it compulsory and should not make it compulsory as Indian companies have to compete with global companies. Efficiency and performance are key in today's global market".