CII for Maruti sell-off, 40% foreign equity in AI, IA

CII for Maruti sell-off, 40% foreign equity in AI, IA
EEB & AGENCIES

NEW DELHI, APRIL 28: The Confederation of Indian Industry (CII) today rallied in favour of selling off government holding in Maruti Udyog Limited and stated that foreign equity investment up to 40 per cent should be allowed in the both Indian Airlines and Air India.

Stating that the government has no business to be in a highly competitive manufacturing industry, newly appointed CII president Arun bharat Ram said the chamber would be taking up this issue with key policy makers, disinvestment ministry as well as with trade unions. These meetings would also chalk out the time frame and extent of equity to be divested in MUL as also in other public sector undertakings.

``We will be working closely with the government and trade unions to identify the companies which need to be privatised. Though we are yet to finalise the list, I feel even Maruti should be put on the sell-off list,'' he said.

The chamber would also identify a safety net for the workers as several jobs are likely to fall off following this privatisation exercise. ``CII proposes to play a catalytic role in energising privatisation of PSUs,'' Bharat Ram added.

The economy, he said, must grow at 8-10 per cent over the next few years in order to create enough jobs. ``For achieving this growth rate, we need to take the inefficient pats out of the system and that is what we intend to achieve with this exercise,'' he said.

Regarding the civil aviation sector, Bharat Ram proposed allowing upto 40 per cent foreign equity in both Indian airlines and Air India. ``In fact, foreign airlines or any other foreign investor should be allowed to pick up 40 per cent stake in any company in the aviation sector, be it for domestic airlines or for foreign carriers.''

7% GDP GROWTH: CII today forecast a GDP growth of seven per cent for the 2000-01 fiscal year, but restrained from making any estimates for fiscal deficit. ``We are not sure as to how much would the government be able to mobilise this year through the disinvestment exercise. And so, we are being cautious and not making any forecasts on fiscal deficit,'' Sanjiv Goenka, newly appointed vice president of CII told newspersons here today.

Bharat Ram added ``fiscal deficit should be viewed keeping in mind the drought situation, changes, if any, in subsidy rates, and revenues from divestment.''

Besides, a CII delegation would be meeting the West Bengal MPs in New Delhi on May 16 to discuss the issue of political consensus on subsidies. ``We will start our campaign with the Left parties and then approach every other political party to arrive at a consensus,'' Goenka said.

To attain a GDP growth target of seven per cent, agriculture, industry and services sectors should grow at a rate of 1.5 to two per cent, eight per cent and nine per cent respectively. The WPI-based inflation should be between 5.5 and 6 per cent, savings rate between 25 and 26 per cent, import growth at 11-12 per cent, exports growth at 11 per cent, exchange rate at Rs 44.5 per dollar and forex at 42-43 billion dollars, the CII estimates pointed out.

Meanwhile, on the issue of reservation for small medium enterprises, Bharat Ram said removal of quantitative restrictions has made the issue of reservation redundant and inimical to our National interest. On the initiative for an Indo-US free trade agreement, he said, ``it is a draft paper we are in the process of developing with our counterparts in the US. It would not mean free trade but freer trade. Through this we want to increase trade between the two countries.''

CII is joining hands with the Rajiv Gandhi Foundation for rating the competitiveness and investor friendliness of the Indian states. The ratings would be released every six months, Bharat Ram said. ``We believe foreign investors want to know the ground reality in each state to decide on whether to invest there or not. Through this rating exercise, we intend to provide them this information,'' he added.

The chamber would not be involving any official rating agency for the purpose. ``We are doing it in association with the Rajiv Gandhi foundation and the first result would be announced shortly.''