The Telegraph
Since 1st March, 1999
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Reforms roster for industry

New Delhi, March 28: Montek Singh Ahluwalia and his officers in the Planning Commission are drawing up a 10-point charter of reform initiatives that could warm the cockles of the industry but raise the hackles of the Left.

On the list are issues that have always been a hot potato ' easier exit and entry norms (faster closures of comatose units), labour reforms, limited reservation for small units, coal mine privatisation and contract farming.

The document, a copy of which is with The Telegraph, will be sent to the Prime Minister and placed before the National Development Council, a body comprising most cabinet members and chief ministers.

Officials who have worked on the blueprint say it is unlikely to draw the kind of angry reactions from Left parties as Montek's bid last year to rope in experts from multilateral bodies in the deliberations of the plan panel.

Describing it as 'quietly radical, yet couched in pragmatic language' that makes it easier to sell to the Left and BJP hardliners who block decisions in states, officials say the document addresses key issues that will be at the core of the next phase of reforms in industry.

On labour reforms, the list talks of 'rigidity in laws' affecting the industry's competitiveness and the need to build a consensus. While it concedes that this could take some time, it suggests that a beginning could be made by exempting special economic zones and regions from regulations that are followed in the rest of the country.

On coal, the paper suggests privatisation of mines. Until this is pushed through ' the Left sees a red rag in the proposition ' trading in the mineral should be opened up and sale curbs on mines leased to power and steel units lifted.

One area in which the list echoes the Left is state-owned firms, where the focus is not on aggressive privatisation but getting private firms to help revive sick PSUs.

However, the most radical prescriptions are related to easier entry and exit norms.

The objective is to clear legal hurdles to setting up a National Company Law Tribunal, which will replace BIFR. This will ensure that sick and potentially sick firms can be shut down quicker.

The paper wants firms setting up units to be given environmental clearances fast and the long-planned system of single-window permissions brought to fruition.

Other key proposals include allowing contract farming, limiting the scope of reservation for small-scale units, replacing them with easier and cheaper credit, improving the quality of engineering education to international standards and reducing the indirect taxes.

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