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Strategic Management Group in PMO to overcome investment hurdles

Amberish K Diwanji in New York

Prime Minister Atal Bihari Vajpayee on Wednesday announced the setting up of a Strategic Management Group in the prime minister's office which would resolve any difficulty encountered by large investment projects. "An inter-ministerial team will assist the cell which would report to me directly once a month," Vajpayee said.

The prime minister was addressing a US-India Business Summit organised by the Confederation of Indian Industry at the Waldorf Astoria hotel, New York. The address at 1100 hours New York time was the prime minister's last official engagement in New York before he and his entourage departed for Washington DC a couple of hours later.

The prime minister also made some other key announcements concerning annual investment, taxation policy and a series of measures aimed to luring investment, developing key and necessary infrastructure, and boosting the reforms process further.

Speaking of the role of information technology as helping relations between United States and India, he announced to the gathering, "The IT and other knowledge-based enterprises offer the greatest opportunity for mutually beneficial partnership between India and American businesses. We have seen the successes of this partnership, but this is just the beginning. The future is going to be immensely more successful and fruitful."

Pointing out that the last 10 years had seen investment approvals of only $ 15 billion and actual investments were much less, the prime minister declared that India was setting a target of $ 5 billion annual inflow beginning next year and that the target would be raised to $ 15 billion over the next three years.

"This is ambitious. It is, however, achievable," said Vajpayee, adding that at the minimum, everyone should agree to double bilateral trade over the next three years.

Vajpayee told his huge audience comprising captains of industry - both Indian and American - that apart from motivating them, he realised that changes were needed. "I am not unmindful that you often find our rules, regulations and procedures burdensome," he said.

Hence, said Vajpayee, the Strategic Management Group and added that he would urge the chief ministers to take a similar initiative. "I am sure this will impart some momentum and seriousness to address 'implementational' concern," he stated.

The prime minister pointed out how during his Independence Day address this year he had spoken of doubling the nation's per capita income over the next decade. "This implies an annual GDP growth of 9 per cent and more, but India will achieve it," he declared.

Vajpayee admitted that while India's tax rates were internationally competitive, tax administration needs significant improvement. "Tax reforms also require urgent reforms and the Double Taxation Treaty needs to be revisited," he added.

Stating that the reforms process was on an irreversible course, the prime minister pointed out that discussions and differences within a party and across parties are natural in a democratic polity. "Open public discussions fortifies national consensus. It mobilises social support and protects reforms from uncertainties of political change," he said.

But he added that the government was keen to alter the focal point of change and claimed that as a result of his government's efforts, reforms are now seen as being perceived less and less as being elitist driven.

"We are determined to ensure that the benefits of reforms do not bypass the common man. We are taking concrete measures to cushion the impact of change on the weaker sections of the society," he stated, adding, "The trickle down effect of growth is often slow. Which is why, we are consciously trying to harmonise faster economic growth with equitable development."

The prime minister declared that India was determined to ensure that the benefits of reforms do not bypass the common man.

He said his government had strengthened the focus on agriculture and rural development, while rural connectivity, safe drinking water, shelter and sanitation were being given a higher priority.

Pointing out that the most critical resource in the emerging knowledge economy was the enrichment of India's vast human capital, Vajpayee stated, "We are paying far greater attention to the development of the social sector - primary health and primary education."

The prime minister listed the new opportunities created by his government: