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Govt pledges to accelerate economic reforms

Setting the reform agenda for the Budget to achieve 8 per cent growth, President K R Narayanan on Monday said agriculture will be freed from the shackles of the past by modifying Essential Commodities Act and allowing inter-state movement of farm products.

Marking the beginning of the Budget Session by his address to Parliament, Narayanan said the government will take steps to strengthen rural credit cooperatives to provide critical input to farmers at their doorsteps and formulate comprehensive strategy to check post-harvest losses totalling Rs 700 billion annually.

Voicing concern over the economic slowdown, Narayanan said reforms in power sector, which is at crossroads, will be hastened and more schemes will be formulated to strengthen small scale industries to meet the challenges of globalisation.

Noting that poor financial health of the state electricity boards was the primary reason for the alarming situation in the sector, Narayanan said the new Electricity Bill will make power reforms mandatory for all states.

"It will be incumbent upon the states to set up their own state electricity regulatory commissions. At the same time, however, the bill is flexible to give freedom to states concerned to adopt its own model of reforms depending upon the ground realities," he said.

Stating that the new tourism policy will be finalised soon, Naryanan said it will focus on public-private to provide infrastructure and tourism services to make the industry as a major catalyst of economic growth.

Narayanan said the government will soon announce new policy initiatives to encourage Indian-owned shipping companies to compete globally.

The dismantling of Administered Pricing Mechanism in the oil sector from April 1 this year would result in gradual emergence of a competitive market with minimal intervention.

"I am happy to announce that the waiting list of over 11 million of LPG connection was entirely liquidated in 2001. Over 1,500 LPG distributorships are proposed exclusively for rural areas to increase the reach of LPG for rural people," he said.

In spite of downturn in the global economy, India has continued to maintain its dominant place in IT exports."We are well on our way to achieving our target of software exports of $50 billion by the year 2008," he said.

He said other knowledge-based industries like bio-technology too are at a take-off stage and their contribution to the economy will only rise in the coming years.

The government is taking several supportive policy initiatives to increase the exposure as well as exports of Indian films and music to world markets, he said adding this will also enable Indian content service providers to become as sought after abroad as its IT professionals are.

To ensure productive utilisation of resources, Narayanan said there was need for urgently bringing about a bankruptcy legislation which would allow quick payment of dues of workers and exit of non-viable firms.

Narayanan said the 10th five year plan which begins this year, proposes to establish specific monitorable targets covering economic, social and environmental dimensions of human development.

''The attainment of plan target is contingent on our ability to significantly increase the investment rate in our economy, step up the productivity of existing capital assets, undertake second generation policy reforms to improve the efficiency of new investment and facilitate and encourage a deepening and broadening of reforms in all the states'', he said.

''If providing universal digital connectivity was one of government's priority, the other was to speedily and significantly improve physical connectivity all across the country'', the President said.

The National Highway Project and the Pradhan Mantri Gram Sadak Yojna would generate 190 million mandays of direct employment and create a demand for 10 million tonnes of cement, one million tonnes of steel and a very large quantity of road related domestically manufactured equipment.

The Union Government is giving almost Rs 10 billion a year to states to improve state highways and major district roads apart from the Rs 100 billion to be spent every year in the next two years for the National Highway Project.

The government also proposes to further enhance allocation to Pradhan Mantri Graham Yogna through non-budgetary resources, Narayanan said adding that under the scheme nearly Rs 70 billion worth of proposals have already been sanctioned in all states and union territories.

Emphasising that food security of the poorest of the poor was the first priority of the government's agriculture policy, Narayanan said more than 3 million tonnes of foodgrains have been allotted to 11 states affected by drought or other natural calamities free of cost since January 2001 for undertaking the food-for-work programme.

This is apart from the increased allocation to below the poverty line families. Stressing that India's cattle wealth was one of the neglected areas of rural economy, Narayanan said the government would give serious consideration to the recommendations of the National Commission on Cattle which reviewed the relevant laws relating to protection, preservation, development, well-being of movement of cattle besides ensuring improved functioning of gaushalas and gausadans.

On divestment, Naryananan said it was no longer a matter of choice but an imperative. The prolonged fiscal haemorrhage from the majority of these enterprises cannot be sustained any longer.

The divestment policy and the transparent procedures have now been widely accepted and the shift in emphasis from divestment of minority shares to strategic sales has yielded excellent results.

To ensure productive utilisation of resources, Narayanan said it was not desirable that these remain locked up in unviable, non-operating units. It would be much better for the units, its workers, creditors and the economy in general, if there was a system of quick takeover of non-viable units so that capital continued to be productively employed.

Narayanan was appreciative of India successfully defending her national interest at the WTO ministerial conference at Doha last year.

PTI

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