Plan Panel for de-regulation of sugar, fertiliser sectors

New Delhi, June 18 (UNI) While maintaining an ambiguous position on labour reforms and silence on disinvestment, the Planning Commission has recommended a slew of steps to spur industrial growth during the Eleventh Plan, including de-regulation of sugar and fertiliser sectors and further pruning of items reserved for the small scale sector.

"Accelerating to 8.5 per cent growth in GDP will require industry to grow at ten per cent and manufacturing at 12 per cent. This calls for substantial increase in investment in the industrial sector, combined with technological upgradation and modernisation to achieve efficiency levels needed to survive in an increasing competitive world," the Commission says in the draft Approach Paper to the Eleventh Plan.

The paper is to be circulated among Chief Ministers of various States for a final nod of the National Development Council (NDC), whose meeting is slated for August.

It also calls for a comprehensive review of the mining policy to exploit the "largely unexplored mineral wealth". It says there is enormous scope for attracting investments in this high capital intensive area.

In an obvious attempt to refrain from entering into contentious issues, the paper is completely silent on the issue of disinvestment.

Faced with stiff resistance from the left parties, disinvestment has been put on the back-burner by the UPA government.

Besides, State governments too want to go slow on disinvestment of PSU's under their control.

The paper has paradoxically been prepared under the guidance of Planning Commission Deputy Chairman Montek Singh Ahluwalia, known for his forthright pro-liberalisation views. But analysts say the Plan Panel Deputy Chief is a much mellowed down person trying to achieve a consensus of the Chief Ministers on the Approach paper so that operation of the Plan itself is a smooth affair.

The Paper says some industries, such as fertilisers and sugar, continue to be subject to controls and there was room for de-regulation.

"The Central government has already done a great deal to free entrepreneurs from dsyfunctional controls, but there is an unfinished agenda which needs attention," the Commission says.

It says the list of items reserved for small scale industries needs to be further pruned to allow units in these areas to expand to a competitive size.

"The inflexibility of our labour laws may be denying us the opportunity to expand employment in the organsied manufacturing sector. This is a sensitive issue but the Central government should initiate a dialogue with labour leaders to evolve a consensus. There is scope for improvement without resorting to extreme measures which would jeopardise legitimate labour interests," the paper says.

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