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Mass reformers needed to banish poverty, says FM

Federal Finance Minister Palaniappan Chidambaram on Saturday reiterated that the reforms process initiated seven years ago would be continued and called for the creation of a ''mass of reformers in Parliament and the society'' to banish poverty from the country in the next 20 years.

In an obvious reference to the opposition to the insurance regulatory authority bill in parliament, he said in his address to the 24th National Management Convention in Bangalore, that the need of the hour was a combination of good economics and good politics. Otherwise, the country would continue to be poor.

Referring to the speedy growth of some of the Southeast Asian countries, Chidambaram said they had a good economic system backed by good politics. Malaysian Prime Minister Mohammed Mahatir could take the decision with more confidence than the Indian prime minister.

Stressing the need for setting a goal for growth, he said anything coming in its way should be ruthlessly chopped. He cited the example of Arjuna in the epic Mahabharata, who concentrated only on his target.

He said that in pursuit of liberalisation, five laws were being revamped and the new company law bill would be introduced in Parliament next week. The working draft income tax bill was ready and would be placed for debate while the foreign exchange and the money laundering act bills were in the final stages of preparation.

Chidambaram said another 500 laws were crying for amendment. ''Lawyers and the managers should come together to bring these changes in double quick time,'' he observed.

Calling for a long-term perspective for banishing poverty, he said, "We must not yield to the temptation and have short-term objectives to win elections or unseat a person to accommodate another."

The minister said he would continue to cut excise and customs duties to keep industry competitive. The experience was that the deregulated sector was doing better than insulated ones.

He pointed out that the overregulated infrastructure sector had done badly in the previous year, adding that had the coal, petroleum, ports and civil aviation and power sectors done well, the growth rate would have been better than the 6.8 per cent registered last year despite the liquidity crunch and the high interest rate.

Chidambaram said India should maintain a growth rate of over eight per cent in the next 15 to 20 years and it would be better placed with a per capita income of 1,500 dollars as against 300 dollars now. The country's growth rate had been just over three per cent in the first three decades of Independence. Had it been around seven per cent, the country would have been in the middle income group and better placed in terms of employment and other facilities.

He said the country needed a lot of investment to address poverty and improve the social sector. About Rs 400 billion were needed for primary education and millions of rupees for other vital sectors. "Money will come if we grow at a clipping rate," he added.

Chidambaram pointed out that India had helped several countries to perform better and banish poverty. South Asia was the poorest region with a per capita of $350 dollars, while the sub-Sahara region had a per capita of over $500, he added.

He stressed the need for tapping the saving of other countries as the country needed 100 to 150 billion dollars for the creation of infrastructure alone. Rural bodies needed to be empowered to ensure better facilities for the people, he added.

The minister said the inflation rate had dropped to an all-time low of 4.02 per cent in the last 12 years and foreign reserves had swelled. With border barriers virtually disappearing, there was access to unlimited resources, he said.

Stating that he was not against public sector units, the finance minister wondered why should they be timid when nine of them had the ability to become global giants. It mattered little for him on who managed as long as they made profits. In some of the sectors, India was among the top three nations in the world, he said, and added the position should be maintained.

Chidambaram said the country could be proud of some of its achievements in the last five decades of Independence. But there was a need to take a pledge to banish poverty in the next 20 years and to have another tryst with destiny, he concluded.

UNI