CHANDIGARH, March 9: The Confederation of Indian Industry (CII) secretary general Tarun Das on Monday set the agenda for the new government at the centre "to bring back the government into infrastructure and not only the private sector", to cut the "excise duty", to come out with the "credit policy for April-September" immediately on assumption of power and to merge weak banks with healthy ones to avoid a south-east Asia like situation.The new government would face a "huge challenge" as it has to get back from the 5 per cent to at least 7.5 per cent growth, said Tarun Das talking to select mediapersons on his visit to Chandigarh this afternoon.
He said the new government must consider the fact that the economy suffered as a consequence of the credit squeeze. And when the government tried to bring down inflation rate to 4 per cent, the effect was seen in 1996-97 and the worst in 1997-98.
The gross domestic product that was 7.5 per cent in 1996-97 mainly due to a good agriculture and not the industrywhich was down even then, has now come down to 5 to 5.5 per cent. Steel industry was down, building material industry was in a bad shape and basic industry was not showing any signs of recovery.
He said the government should give priority to infrastructure projects and it must allocate sufficient funds in the budget for upgradation of existing roads, existing power stations, airports, ports and not solely depend on the private sector for infrastructure projects.
He suggested that the new government should cut excise rates which would lead to greater compliance. Citing the example of the cut in direct taxes, he said the revenue collection was still the same. The government should be prepared to accept a "higher fiscal deficit" of say 6 per cent than the anticipated 5 per cent.
The best indication of what the new government thinks of the economy would be its credit policy which it must announce in March itself, he said.Merger of weak banks with healthy ones has become almost imminent. The Narasimhancommittee report was ready to be submitted to the new government, Das said. The CII report on agricultural reforms was ready and would be submitted to the new government.
It suggests changes that were needed in agricultural business like marketing and export. He said that the CII might have to take upon itself the task of "communicating" to the common man what popular slogans given by political parties and subsidies meant in the long run. Referring to the Punjab policy of free electricity for farmers, he said that such policies cannot sustain for long. He suggested that the new government should not have separate cabinet ministers for say transport, civil aviation, railways, energy, non-conventional energy, power and so on.
Let there be a transport minister of cabinet rank and a couple of state or deputy ministers for separate departments with the cabinet ministers.He did not agree with the suggestions by some chambers that industry had the expertise which the new government could utilise foradministration or business or professional bodies. Commenting on Sebi's working he said that people on "deputation" cannot run an organisation like Sebi effectively as there is no sense of belonging.
He, however, said that industry should never take over the administration or run such bodies. Let industry confine itself to its sector where there was a lot of competition and challenge.
Meanwhile, Tarun Das, who has announced his decision to step down from the key post in June, said that he did not think much would change after he leaves as the CII has a strong organisational team.
