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October 25, 1999
Top priority to economy: Narayanan
India's President K R Narayanan today said the government accorded top priority to the second phase of economic reforms in financial and infrastructure sectors to make the Indian economy more sound and vibrant.
Addressing the first session of both houses of Parliament after elections to the 13th Lok Sabha, he said the government will evolve a programme for achieving fiscal rectitude through improved expenditure management, undertake far-reaching tax reforms and secure speedier restructuring and disinvestment of public sector undertakings, including strategic sales.
''The government also proposes to initiate steps to ensure foreign direct investment or FDI inflow of at least $ 10 billion per annum. There shall be an automatic route for FDI clearance except in a small list of carefully chosen areas,'' Narayanan said.
A taskforce on tax reforms shall be constituted to recommend a time-bound programme of reforms of tax structure, both direct and indirect. Reform in banks and financial insitutions would be accelerated by reducing non-performing assets or NPAs and strict application of prudential norms , he said.
Expressing the government commitment to promote the interest of labour, the president said the second Labour Commission will study the changes needed in various labour laws in order to better achieve the welfare of labour, faster generation of additional employment, and accelerated industrial growth and exports.
Narayanan said that during the current year, the Indian economy was expected to grow by more than six per cent. Inflation as measured by the Wholesale Price Index was around two per cent, the lowest in the past two decades.
Nothwithstanding an adverse global economic environment last year, the Balance of Payments position remained comfortable and foreign exchange reserves were at a record level of nearly $ 33 billion.
In the field of infrastructure, the government will take urgent steps to improve the situation by involving greater participation of private sector within a strong regulatory mechanism, Narayanan said. In the power and energy sector, the Centre will work closely with state governments for time-bound corporatisation of state electricity boards.
Generation, transmission and distribution of electricity will be unbundled as separate activities. Tariff reforms, privatisation of transmission and distribution of power and setting up of state electricity regulatory commissions will be accelerated, he added.
The recommendations of Hydrocarbon-Vision 2020 Report will be implemented. An accelerated timeframe for dismantling the administrative price regime will also be finalised quickly, he said.
Narayanan said the Coal Mines Nationalisation Act will be suitably amended to remove hurdles in the growth of this important sector of the economy.
The ministry of surface transport has been reorganised into the department of road transport and highways and the department of shipping. The intergrated transport policy shall be finalised soon, he said.
The National Highways Authority of India will be strengthened to enable it to quickly implement the National Highways Development Project including the east-west and north-south corridor.
A Railway Reforms Commission will soon be set up to evolve a new resource mobilisation strategy, rationalise tariffs and prioritise the project portfolio.
The Telecom Regulatory Authority of India will be strengthened to increase investor confidence and create a level-playing field between public and private operators by suitably amending the TRAI Act.
A group of experts will be constituted to recommend a new legislation in place of Indian Telegraph Act, 1885 to enable India to seize the new opportunities, created by the technological convergence between telecom, computers, television and electronics, he said.
The President said a new ministry of information technology has been created as a nodal insitutional mechanism for facilitating all the initiatives in the central government, state governments, academia, the Indian private sector and successful IT professionals abroad. The ministry will implement a comprehensive action plan to make India an IT superpower in the early part of next century and achieve a target of $ 50 billion software exports in the next nine years.
A legislation to promote e-commerce will be introduced soon. A taskforce for pharmaceutical and other knowledge-based enterprises will be constituted for making India a world leader in this sector.
Infrastructure initiatives will lay a firm foundation for the revival and expansion of India's industrial base.
As a member of the World Trade Organisation, India will continue to interact with other nations to further protect and promote national interests. Towards this objective, the government was preparing a well thought strategy for the coming Seattle conference, he said.
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