BUDGET 2000
SPECIALS
INTERVIEWS
COMMENTARY
GOVT&ECONOMY
Y2K: BIZ FEATURES
INDIA & THE WTO
CREDIT POLICY
BIZ IN THE USA
CARS & MOBIKES
MANAGEMENT
CASE STUDY
BIZ-QUIZ
USEFUL INFO
ARCHIVES
NEWSLINKS
SEARCH REDIFF

CII favours Maruti Udyog sell-off

The Confederation of Indian Industries, or CII, today rallied in favour of selling off government holding in Maruti Udyog Limited, or MUL, and stated that foreign equity investment up to 40 per cent should be allocated in the Indian Airlines and Air-India.

Stating that the government has no business to be in a highly competitive manufacturing industry, newly appointed CII president Arun Bharat Ram said the chamber would be taking up this issue with key policy-makers, divestment ministry, as well as with trade unions.

These meetings would also chalk out the time-frame and extent of equity to be divested in MUL as also in other public sector undertakings, or PSUs.

''We will be working closely with the government and trade unions to identify the companies, which need to be privatised. Though we are yet to finalise the list, I feel even Maruti should be put on the sell-off list.''

The chamber would also identify a safety net for the workers as several jobs are likely to fall off following this privatisation exercise.

''CII proposes to play a catalytic role in energising privatisation of PSUs,'' Bharat Ram added.

The economy, he said, must grow at 8-10 per cent over the next few years in order to create enough jobs. ''For achieving this growth rate, we need to take the inefficient pats out of the system and that is what we intend to achieve with this exercise.''

Regarding the civil aviation sector, Bharat Ram proposed allowing up to 40 per cent foreign equity in both Indian Airlines and Air-India.

''In fact, foreign airlines or any other foreign investor should be allowed to pick up 40 per cent stake in any company in the aviation sector, be it for domestic airlines or for foreign carriers.''

CII skirts fiscal deficit target, sets 7% GDP growth rate

The CII today forecast a gross domestic product, or GDP, growth of seven per cent for the 2000-01 fiscal year, but restrained from making any estimates for fiscal deficit.

''We are not sure as to how much would the government be able to mobilise this year through the divestment exercise. And so, we are being cautious and not making any forecasts on fiscal deficit,'' Sanjiv Goenka, newly appointed vice-president of CII, said.

Arun Bharat Ram added, ''Fiscal deficit should be viewed keeping in mind the drought situation, changes, if any, in subsidy rates, and revenues from divestment.''

To attain a GDP growth target of seven per cent, agriculture, industry and services sectors should grow at a rate of 1.5 to two per cent, eight per cent and nine per cent respectively, the CII estimates pointed out.

The wholesale price index, or WPI, based inflation should be between 5.5 and 6 per cent, savings rate between 25 and 26 per cent, import growth at 11-12 per cent, exports growth at 11 per cent, exchange rate at Rs 44.5 per dollar and forex at $ 42-43 billion, the CII said.

Meanwhile, on the issue of reservation for small medium enterprises, Bharat Ram said removal of quantitative restrictions has made the issue of reservation redundant and inimical to our national interest.

On the initiative for an Indo-US Free Trade Agreement, he said, ''It is a draft paper we are in the process of developing with our counterparts in the US. It would not mean free trade, but freer trade. Through this we want to increase trade between the two countries.''

Bharat Ram revealed that CII's initiatives would broadly cover areas such as research and development, technology and bio-informatics, focus on small and medium enterprises, privatisation of public sector enterprises, corporate governance, competitiveness services, setting up of a services council, enabling state governments, initiatives in infrastructure, and financial sector reforms.

Its initiatives in R&D would include working with the industry and labs to raise awareness and spread the use of R&D, strengthen the patent office and setting up of an enterprise development fund to help start-ups.

Recognising that bio-informatics is an area that presents immense opportunities for India, CII would create a genomics and bio-informatics network, said the new CII president.

The year 2000-2001 would also see a major expansion of the chamber's activities in the sector with the setting up of sub-contracting exchanges, an enterprise development fund.

CII would also continue to build on its initiatives in the field of corporate governance and develop its network with the World Bank, Asian Development Bank, NASDAQ, New York Stock Exchange, Bombay Stock Exchange, National Stock Exchange, the Securities and Exchange Board of India and the Reserve Bank of India.

CII to rate states

The CII is joining hands with the Rajiv Gandhi Foundation for rating the competitiveness and investor friendliness of the Indian states.

The ratings would be released every six months, Bharat Ram said.

''We believe foreign investors want to know the ground reality in each state to decide on whether to invest there or not. Through this rating exercise, we intend to provide them this information,'' he added.

The chamber would not be involving any official rating agency for the purpose. ''We are doing it in association with the Rajiv Gandhi Foundation and the first result would be announced shortly.''

UNI

Business