Pranab assures India Inc. on reforms

Marathon meet with top industrialists sought to bridge trust deficit over seeming lack of policy initiatives

The UPA government on Monday reached out to India Inc. with the sole purpose of bridging the trust deficit and clearing the air over a seeming lack of policy initiatives that were gaining ground in an environment of cynicism amid a slew of scam cases now in various courts.

The initiative was taken by Finance Minister Pranab Mukherjee, who had a marathon meeting with top industrialists such as Ratan Tata, Anil Ambani, Sunil Mittal, Anand Mahindra, Shashi Ruia and Y.C. Deveshwar, Sunil Munjal, N.R. Narayana Murthy, G.M. Rao, Venu Srinivasan and G.V.K. Reddy, among others. Mr. Mukherjee was aided by Commerce and Industry Minister Anand Sharma along with top officials of both the key economic Ministries.

In his opening remarks, Mr. Mukherjee said: “There has been some cynicism expressed of late regarding lack of movement on policies and institutional processes. I find this view to be based more on perception than facts.”

The meeting with the corporate honchos, which was preceded by interactions with various sections of the media spread over a few days last month, appeared to have yielded the desired results. “If there was a trust deficit, it was dispelled today [Monday] vanished today. There was an assurance on time-bound action on our proposals,” Mr. Mahindra told the media after confidence-building discussions.

Agreeing with Mr. Mahindra's view, Mr. Ambani said: “The interaction will certainly go a long way in building the momentum needed to catalyse economic growth”, while Mr. Mittal felt that the discussions “took place in a frank and open manner”.

At the meeting convened by Mr. Mukherjee in the wake of a slowdown in industrial production, rising cost of borrowing and global uncertainties and a perceived policy paralysis within the government, the industry was asked to furnish five specific suggestions to rev up the economy. The Commerce Minister, on his part, stressed that the government was fully committed to the reforms agenda and the various initiatives, in the pipeline, would be rolled out soon.

Mr. Mukherjee pointed out that the weakening of business sentiment was “partly due to an uncertain global environment and perhaps also on account of the rising cost of domestic credit”. A tight monetary policy, he said, has been necessitated owing to the continuing challenge posed by inflationary pressures. However, he maintained that the fundamentals of the country's economy remained strong and the growth drivers in the medium term remained broadly intact.

As if summing up the outcome of the meeting, Mr. Narayana Murthy said: “They [the government] wanted to listen to us...By and large, they would certainly try and help us.”

Assuring the corporates of the government's reforms agenda being on track, Mr. Mukherjee expressed confidence that major financial sector legislations such as the Banking Laws Amendment Bill, the Pension Fund Regulatory and Development Authority Bill and the Insurance Laws Amendment Bill would be passed in the ongoing monsoon session of Parliament. Besides, the B.K. Chaturvedi Committee report on issues relating to the reconciliation of environmental concerns and coal mining would also be discussed by the Group of Ministers later this week.

The Finance Minister noted that such interaction should help in building the synergy needed to propel the economy to greater heights in the coming months.

In his concluding remarks, Mr. Mukherjee said that he was aware that much more could be done by both the government and the private industry. He invited concerns and suggestions from the top business leaders present. He said that there was a panel of Secretaries to take note of sector-specific concerns as well.

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