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Press Release: 10th July, 2004 Reacting against disinvestments of PSU sellouts, he said that the confidence of the public should be the paramount consideration for disinvestments. With the manufacturing sector picking up last year (with a growth of 9.25%) he felt that it will perhaps continue but might get affected by duty structure relating to the purchase of raw materials. Another member from the industry who was present was Mr. Debashish Mahapatra, founder Verve Consulting which leads in financial reforms and management practices. He has 10 years of experience as a public system change and implementation expert with organizations like Orissa Forest Development Corporation (OFDC) and Tribal Development Cooperative Corporation (TDCC). He was of the view that the government had no option but to increase the cap for FDI in various sectors like telecommunications (increased to 74%), civil aviations (increased to 49%) and insurance (increased to 49%) because the very nature of these sectors required huge investments. Mr. D. Mahapatra said that the increase in investment limits in the Telecom sector was a fait accompli as it is one of the sectors that require huge investments, which is only possible through external funding. The increase in limit in insurance cannot do enough to boost the sector. The budget has difficult ends, which is to be met by imaginary receipts. There is no huge driver pushing the economy, only little bits and pieces are pushing it but it is not enough. Regarding the policy issues, Mr. Mahapatra was not very bullish on some of the announcement. For example, he said the mid day meal system has been around for several years, but since it hasn't shown the desired results, the Rs. 4000 entitled for it could be used to build more schools instead. Similarly whereas he did appreciate the government giving attention to irrigation he also mentioned that these were not new schemes. The government did not talk about any new big growth driver, the focus seemed to be distributed haphazardly and even in those terms it was not clear about the implementation details. It was like accomplishing difficult things with only imaginary methods. Contributed by - |
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