Prime Minister Manmohan Singh on Saturday asked the industry to enhance its contribution for creation of infrastructure through increased investment and assured that "holding the price line" was a priority for the government.
Addressing the captains of industry at the meeting of his advisory council on trade and industry, Singh said, "Our track record in inflation management has been impeccable and I have already stated that holding the price line is a priority for the government."
Attributing the recent inflationary pressures to an "increase in world oil prices", Singh, however, said, "We can't insulate ourselves from the impact of movement in worldwide prices."
The second meeting of the 18-member Council was convened in New Delhi as part of efforts to evolve certain policy initiatives to boost investment at a time when the stock market is booming and industrial outlook is buoyant.
Prominent members of the council include V Krishnamurthy, Ratan Tata, Mukesh Ambani, Keshu Mahendra, Azim Premji, N R Narayana Murthy, Rahul Bajaj, Kumaramangalam Birla, J Godrej, Sunil Mittal, Sunil Munjal, Deepak Parekh and R P Goenka.
Finance Minister P Chidambaram, Commerce Minister Kamal Nath and senior government officials were also present at the meeting.
Amidst an uproar over the steep hike in fuel and cooking gas prices, the prime minister advocated a middle-path of de-politicising energy prices while ensuring protection of interests of the poor.
The government has been facing flak not only from the Opposition but from its own allies -- the Left parties -- over the steep price hike announced a month back. The Bharatiya Janata Party recently took out a huge rally in the Capital protesting the spiraling prices.
Committee will monitor industrial projects
The government has decided to set up a standing committee of officials and industry representatives to monitor the implementation of industrial projects on a continuous basis.
The prime minister also asked the industry representatives to come out with suggestions to weed out archaic laws, and measures to adopt international best practices, Mahindra group chairman Keshub Mahindra said after the meeting.
The industry agreed to help in upgradation of ITIs to make the Indian workforce globally competitive. Finance Minister P Chidambaram had proposed in the budget that steps would be taken to upgrade 500 ITIs in the country. He had also sought the industry's help in this regard.
There was a wide ranging discussion on making domestic infrastructure of world-class quality. The industrialists suggested to the government that there should be greater incentive for construction of roads with larger time period for the industrialists to collect tolls and developing the six metros as gateways of India with focussed attention.
PM on inflation
Singling out inflation as a major concern, the prime minister asserted the government was committed to protecting the common man by holding the price-line and speeding up reforms to push up economic growth to 7.5 per cent.
He also said the government was re-energising the economy's growth engine to create the policy and political environment required to boost investor confidence for raising private investment.
Noting that the economy was at the beginning of a new phase of growth, Singh said over the next decade the country would be able to register an annual rate of growth of 7.5 per cent. This, however, requires acceleration in the rate of growth of agricultural production up to 4 per cent and industrial production at around 10-12 per cent.
PM on reforms
Listing out the reform measures, the prime minister said the government would give top priority to bring in massive investments, including in infrastructure and strengthen the regulatory framework in infrastructure and financial sectors.
Seeking to end the tyranny of "inspector-raj", he said to fulfill his commitment to modernise India, "We must reduce transaction cost of doing business.
"We must invest in human development. We must create more employment. We must be a larger trading nation. We must integrate our economy at home and be more integrated globally," he said.
"In this process of ensuring all this we must protect the interests of weaker sections of society through appropriate safety nets and social welfare and be mindful of the environment. Both government and business must enter into a social contract to ensure these objectives are met," he said.
Touching upon the various steps taken by UPA government in the past six months, Singh said there were several initiatives to increase the economy's growth prospects, its competitiveness while at the same time addressing the concerns of equity and social justice.
The meeting also stressed on improving tourism infrastructure with the help of private players. The industry representatives also expressed concern over the port facilities in the country and said "something should be done immediately to decongest ports and raise investments in the sector".
They also sought a long and durable open sky policy for a period of five years.
PM on job reservation
Asked whether the issue of job reservation in private sector was discussed, Mahindra said it was agreed that the deprived people should be given more opportunities in education to help them make competitive.
Infosys chairman and chief mentor N R Narayana Murthy cautioned that the industry should not be rendered uncompetitive by bringing in measures that were deterrent to growth and instead efforts should be undertaken to make the Indian workforce globally competitive.
He said the industry had made rapid progress during the last few years and steps should be taken to encourage this momentum.
Mahindra said the meeting was very interactive and the prime minister and his colleagues intently heard the views of industry.
Murthy said there was need to create more wealth rather than merely stressing on distribution of wealth.
On labour reforms, Murthy said a suggestion was made to exempt the workforce at the Special Economic Zones from the general labour laws to make it more competitive.
Murthy said growth should be more participative and there should be fairness towards every section of society.
The government agreed with the industry's view to harmonise procedures between the Companies Act, Securities an Exchange Board of India and the Security Act.
The industrialists demanded removal of bureaucratic delays and simplification of laws to accelerate growth.
The rules should be simplified in a manner so as to obviate different interpretations on it.
On other issues, the industry suggested that users of roads should be included in the committees of National Highways Authority of India.
The meeting also discussed the problems regarding future availability of water and called for better water management.
Government officials said the Council on Trade and Industry will meet once in three months.