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June 1, 1998


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'Indian industry must be made to face global competition'

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Rajesh Shah

I strongly welcome the Budget which continues the with all the reform programmes of the past. It also carries it a lot further. It creates conditions for capital expenditure for infrastructure sector...

The disinvestment and privatisation of the public sector was no surprise for us as most of these measures were part of the BJP manifesto and national agenda for governance of the coalition government...

As for what the Budget should do to the economy, we would like to see foreign investment in insurance sector and the new Companies Act.

We would also like to see the measures that are taken to for the capital goods industry. Some more steps have to be taken to receive the capital market in specific ways have to be made.

We would also like to see concrete measures for boosting exports. However, I am sure that working with the finance ministry and others we would be able to impress upon the government.

There is nothing in this Budget which goes against foreign investment; in fact, the finance minister has made the procedure for foreign investment simpler. Opened up more industries for foreign investment and assured all those investing in the crucial area that the government intends to monitor and assist all the projects to speed up implementation...

The insurance sector is very important. For the first time ever since nationalisation took place in the 1950s the insurance sector has been opened up to private competition. A regulatory body will also be set up. It has not been opened up to the foreign sector but I believe that it is only a matter of time before it is done.

Rather than see the eight per cent import duty as protection only, it should be seen as a move to remove some of the disadvantages without violating the commitments given to WTO. I feel import duties have to come down and the Indian industry made to face global competition.

Rajesh Shah, managing director, Mukand Iron and Steel, and president, Confederation of Indian Industry, spoke on the Rediff Budget Chat.

Budget '98

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