The Hindu : FICCI chief seeks focus on economic security

Online edition of India's National Newspaper
Friday, Jul 05, 2002

Business

Business

FICCI chief seeks focus on economic security

By K. T. Jagannathan

CHENNAI JULY 4. The President of Federation of Indian Chambers of Commerce and Industry (FICCI), Rajendra S. Lodha, underlined the fact that it is time the powers-that-be galvanised their focus on economic security and poverty eradication programme of `implementable' kind.

He feels that a country acquires real power only through `economic security. Having become a nuclear power, the emphasis should now drift towards achieving economic power. A focussed endeavour on these fronts, Mr. Lodha feels, will go a long way in "energising everyone''.

With a policy tuned towards realising economic security, in his reckoning, it is entirely within the realm of possibility for the economy to turn competitive and achieve 7 per cent growth. Clearly, he is concerned over the falling share of the manufacturing sector in GDP (gross domestic product). The share has fallen to 26 per cent. In China, however, the share of manufacturing sector in GDP is 49 per cent.

Mr. Lodha presages competition from China in a major way. "We can't just wish it away," he argues. He feels China could prove a thorn in the flesh of farm sector as well.

He lists seven factors which he calls `lit pits' that directly impinge the economic security of a nation and, hence, require immediate attention.

They are labour, infrastructure, transactional cost, power cost, interest, tax and small-scale reservation.

Mr. Lodha is not amused by the move to remove incentives for long-term savings and pre-empt them by forcing their flow into government securities. Given the quality of government expenditure in the context of competitive populism indulged in by States, he is unclear if these help the cause of infrastructure building in the country. The answer to this lies in passing the fiscal responsibility bill without any dilution, he says.

Mr. Lodha is of the view that the so-called Special Economic Zones (SEZs) are making halting progress only. He feels that SEZs should be exempt from application of labour laws. The current labour laws, he feels, are anti-employment.

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