Rein in parallel economy to shore up rupee value: Minister

Natchiappan calls for cooperation between State governments and the Centre

Rev. Fr. G.Lawrence Amal Raj, Director, St. Joseph’s Institute of Management, presenting a shawl to Union Minister of State for Commerce and Industry E.M. Sudarsana Natchiappan at a seminar in Tiruchi on Wednesday. Photo: M. Moorthy

Union Minister of State for Commerce and Industry E.M. Sudarsana Natchiappan on Wednesday presented a bale of ideas to bale out the Indian economy from its current crisis. Control over the parallel economy was advocated by him to shore up the rupee while inaugurating a seminar on ‘Currency volatility and economic instability,’ organised by St. Joseph’s Institute of Management at St. Joseph’s College here.

Rejecting the contention that the Indian economy was weak, Mr.Natchiappan said that the country was very rich in terms of human and natural resources. By harnessing the resources properly, it would be possible to tide over the economic crisis, he felt.

The Minister was of the view that it would not be possible to apply the fiscal practices of other nations to correct the Indian economic system, which had traditionally been following certain practices.

It would be enough if steps were expedited to bring the resources of the grey economy to the mainstream.

Indian citizens had been traditionally investing in gold but the quantum of investment was not accounted and the value of gold available in the country was calculated on assumptions. Investments were also made illegally outside the country and the medium of cinema was exploited to invest and earn unaccounted money.

Investments in politics, by way of starting new political parties, and real estate and capitation fee collected by educational institutions were not accounted for. Mining of minerals was another area in which there was huge proliferation of unaccounted wealth. People were in the habit of possessing precious stones worth several crores of rupees without paying any tax for them.

All these wealth should be accounted to sustain the economy.

Mr. Natchiappan wanted the State governments to sit with the Union government to chalk out ways and means to control the grey economy. People could be asked to pay a minimum tax to bring unaccounted wealth out and a scheme similar to the one announced by Manmohan Singh as Finance Minister to bring out black money could be contemplated.

While initiating fiscal measures to tide over the crisis, attempts should be made simultaneously to improve productivity of all sectors.

By enhancing exports and bringing down imports, it would be easy to bring down the current account deficit, he said.

Focus should be on the manufacturing sector, especially the small and medium enterprises that served as the backbone of big industries. The MSMEs should be nurtured properly with special concessions like moratorium on repayment of loans. But a lot of concessions were now provided only for big industries.

The government, he said, had already come out with legislations like the Food Security Act to ensure increased agricultural productivity. These initiatives would help India transform into the ‘food bowl’ of the world by 2025. However, any initiative of the Central government would succeed only with the cooperation of the State governments, Mr. Natchiappan said.

Rev. Fr. G. Lawrence Amal Raj, Director, explained the objectives of the academic exercise, which has been organised with the involvement of the industry and academia.