Unveiling the economic agenda of the new government, President A P J Abdul Kalam on Monday promised massive public investments in agriculture and industry, boost to foreign direct investment, selective privatisation of public sector units and comprehensive tax reforms to achieve 7-8 per cent growth.
Addressing a joint sitting of both houses of Parliament, Kalam said the government will deepen the financial markets, encourage foreign institutional investors while protecting the interests of the small investors and give new avenues for safe investment of their savings and strengthening Securities and Exchange Board of India.
"For boosting the growth rate of GDP, the rate of investment has to be pushed up by rejuvenating the capital markets. The government is deeply committed to the orderly development and functioning of the capital markets that reflect the true fundamentals of the economy," he said.
On divestment
Expressing government's commitment to a strong and effective public sector, Kalam said privatisation would be considered on a case-by-case basis and chronically loss-making units will be either sold off or closed after providing legitimate dues and compensation to the workers.
On stock markets
India's capital markets will be "rejuvenated" for accelerating investments to put the economy in 7-8 per cent growth orbit and, in the process, care will be taken to protect the interests of small investors, Kalam said.
"For boosting the growth rate of GDP, the rate of investment has to be pushed up by rejuvenating the capital markets," Kalam said.
He said PSUs and nationalised banks will be encouraged to enter the capital markets.
Hes stressed that the United Progressive Alliance government was committed to "orderly" development and functioning of the capital markets.
"Interests of small investors will be protected and they will be given new avenues for safe investment of their savings."
On taxation
Stressing that tax rates would be stable and conducive to growth, compliance and investment, the President said the government would undertake major reforms to expand the base of taxpayers and make tax administration more citizen-friendly.
He said value-added tax will be introduced in close cooperation and consultations with trade and industry.
On social issues
Kalam emphasised the government's commitment to eliminating the revenue deficit by 2009 so as to release more resources for investment in social and physical infrastructure.
Subsidies will be targeted at the poor and needy, he said adding a detailed roadmap would be prepared for this purpose.
The government would take effective steps and strong measures to control the price hike of essential commodities, he said and assured that provisions to deal with speculators, hoarders and black-marketeers under the Essential Commodities Act would not be diluted in any way.
On CMP
The President said the Common Minimum Programme of the United Progressive Alliance, supported by the Left and other like-minded parties, reflects the commitment of all participants to implement the programme and make it the foundation for collective maximum performance.
The CMP, he said, was indicative of the broad thrust of the priorities of the government. It would be the sincere effort of the government to implement the programme during the next five years.
"However, the precise content and phasing of the programmes will depend on both the availability of resources and the pace of improvement of the absorptive capacity of various sectors. Our effort will be to move forward on the twin roads of efficiency and equity while maintaining a high degree of fiscal and financial discipline.
"My government will need to devise imaginative measures to ensure that our macro-economic policies balance appropriately the concerns for rapid growth, stability and social equity," Kalam said.
On corruption
Emphasising on the government's resolve to root out corruption, Kalam said black money generation will be effectively tackled and for this, procedures will be streamlined.
The process will be appropriately re-engineered to bring in transparency in governance.
On exports and industry
The government will provide an atmosphere conducive to rapid growth of exports for which procedures will be simplified, tariffs appropriately harmonised and efforts would be made to strengthen infrastructure and reduce transaction costs.
"Textiles industry will be enabled to meet the new challenges imposed by the abolition of quotas under the World Trade Organisation Agreement on Textiles and Clothing in January 2005.
Given its special ecological importance world-wide and within the country, the jute industry will receive a fresh impetus," he said.
Noting that the revival of industrial growth was of paramount importance, he said incentives for boosting private investments would be introduced, FDI would be encouraged and every support would be given to make the Indian industry productive and competitive.
"Competition -- both domestic and external -- will be deepened across industry with professionally-run regulatory institutions in place to ensure that competition is free and fair," he said.
The government will establish a National Manufacturing and Competitiveness Council and soon provide a special package for the small-scale sector.
On farm reforms
Refering to the ongoing World Trade Organisation talks, Kalam said the government would negotiate in a manner to fully protect the livelihood of the farmers, who formed the backbone of the country.
"Government will ensure proper implementation of minimum wage laws for farm labour. Effective measures will be taken to protect the interests of all agricultural workers. The process of land reforms will be speeded up and efforts to distribute the surplus productive land to landless will be redoubled," he said.
On labour laws
Recognising the need for changes in labour laws for rapid growth of the manufacturing sector and expansion of employment opportunities, Kalam said such changes would, however, ensure workers and their families were protected.
With a view to providing guaranteed employment for 100 days in a year to at least one able-bodied person in each rural household, a National Employment Guarantee Act will be legislated soon, he said.
On infrastructure
He said development of infrastructure will get a high priority and public-private partnership will be encouraged for expansion of physical infrastructure such as roads, ports, airports, power, railways and water supply and sanitation.
"Public investment in infrastructure will be enhanced and subsidies in such investments will be explicitly provided through the Budget," he said.
