SSI reservation may go: Advani

NEW DELHI, AUG. 30. The Union Home Minister, Mr. L.K. Advani, today called upon the small scale sector to restructure itself to meet the needs of a globalising economy and the challenge posed by the advent of the World Trade Organisation.

Hinting that it would be necessary to remove reservation and relax labour laws in the sector, he said the new realities of the domestic and international economy would have to be faced. In this context, he felt India could learn a lot from China whose small scale sector had emerged as a powerful engine for its phenomenal economic growth.

He underlined the need for a national consensus on economic issues between the Centre and the States as well as among parties. He also urged shunning of the attitude of ``opposition for the sake of opposition''. Consensus was also needed among employers and employees at the level of individual units. ``The important thing is to understand that the international and national context of doing business has changed,'' he said.

On removal of reservation and relaxing labour laws, he said this might be needed in some areas such as toys, leather products and processed foods where India had a universally- recognised opportunity to expand rapidly. The businesses could compete on cost, quality and range of products with their foreign counterparts only if they made large investments in technology, manufacturing process and marketing. He said it may also be necessary to create alliances between big businesses and conglomerates of small units to harness the opportunities.

Mr. Advani, who was inaugurating the National Convention on Small Scale Industries, said the competition had become acute with the advent of the WTO. As a member, India was obliged to allow imports of many products without restrictions. Small industries faced severe challenges because they had to compete with foreign products which may be cheaper even after levy of duties.

Expressing confidence in the ability of both big and small industry to meet the challenge with determination, innovation and hard work, he said it was not going to be easy as there was a legacy of restrictions hobbling the small scale sector. Many of these constraints had remained intact despite economic reforms.

These included infrastructural issues such as chronic power shortages and logistics problems. The small scale sector also continued to be a victim of `inspector raj'. ``India must wage a war on corruption and red-tapism for the very survival of our industries,'' he said.

Earlier, the Small Scale Industries Minister, Ms. Vasundhara Raje, said the Centre was taking a number of initiatives for the development of small industries in the northeast.