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Govt to set up agency to monitor flows into country

Amidst charges of flooding the country with second-hand capital goods and zero-duty imports, the government on Tuesday announced the setting up of a special group to monitor flows into the country.

The group would review the special problems of capital goods manufacturers as well as importers of such goods, a government spokesman said on Tuesday. This was decided at a meeting between representatives of manufacturing industries and the government, led by Prime Minister I K Gujral and ministers and secretaries of economic ministries.

Manufacturers of capital goods expressed concern that indiscriminate imports would affect growth of the capital goods sector.

Throughout the discussion, concern was expressed that the demand for a variety of goods such as steel and cement was not picking up as much as it should have, and that the government was not spending enough on infrastructural development.

A boost should be given to infrastructure especially the housing and construction sector so as to increase the housing stock in the country, the participants suggested.

In the paper and newsprint sector, the main suggestions that came up were for leasing of land for growing plantations which could serve as raw material for the industry.

The minister for environment and forest would now have to prepare a new people-friendly, eco-friendly and industry-friendly forest policy within four weeks, the spokesman said.

Beginning on Tuesday, the prime minister will review the pace of public investment in various sectors like power, oil, coal, telecommunications, roads and highways.

Besides suggestion to increase investment in infrastructure sector, it was also demanded that industries such as steel and cement should be accorded the status of infrastructural industry for the purpose of taxation and other incentives in the same way that roads now benefit.

Cement manufacturers also complained that they were not getting supplies of good quality coal in required quantity and that they continued to be required to pack cement in jute bags.

It was suggested that jute growers be given other alternatives or that the government be helped to buy up stocks, given the cyclical nature of its production.

There was also a demand for a robust anti-dumping mechanism since a variety of goods were being dumped in the market including in sophisticated industries. Suggestions were also made for an expansion of the present setup.

India is presently following international conventions on dumping.

In the automobile sector, the main complaint was that sufficient credit was not being made available to customers to boost the demand for both personal and commercial vehicles.

Manufacturers wanted the phasing out of old vehicles in order to boost demand for new ones as is the practice in other countries where fresh stocks keep on flowing.

The major points concerning the textile industry was poor upgradation of technology through the cotton technology mission and high costs of manufacturing.

The electronic industry had several difficulties in spite of growth doubling each year, starting with the small size of software companies and the lack of venture capital.

There was also serious shortage of manpower in the size and quality. Manufacturers demanded protection to help the growth of the software industry.

As for hardware manufacturers there needed to be a reduction in import duties as well as protection.

Planning Commission member Prof Sengupta said that there should not be any reversal of economic polices as a result of the present slowdown in growth. What is required is fine tuning rather than reversal.

Finance Minister P Chidambaram said there was no need for a panic reaction against the present slowdown in growth and said there were signs of a strong recovery in the month of September.

By the end of the financial year, the upturn would be sharp and healthy, the finance minister was reported to have said.

Meanwhile, Prime Minister Gujral assured the top industrialists that the government had nothing to do with the telephone tapping in the Tata Tea-ULFA case, and said the Central Bureau of Investigation was given the task even while he was in South Africa.

UNI