No slow down of reforms, PM's remarks misunderstood: Montek

New Delhi, June 3 (UNI) Planning Commission Deputy Chairman Montek Singh Ahluwalia today said Prime Minister Manmohan Singh's remarks at the recent CII conclave were being misread to imply that these were a signal for slowdown of reforms, but said India would need to take bold steps to ensure a ten per cent per annum GDP growth in the future.

"Ten per cent growth is not easy. India would need to take bold steps to achieve this level of growth," Dr Ahluwala said in an interview to CNN-IBN in the programme, 'Devil's Advocate.' The Plan Panel Deputy Chief said it must be remembered that only half a dozen countries have so far achieved a ten per cent growth.

Dr Ahluwalia said the Prime Minister was not offering a comprehensive treatise on achieving inclusiveness, but only put forward his suggestions to the Chamber as to how industry can join in to attain the government's avowed goal of an equitable order.

Dr Ahluwalia explained that the Prime Minister's lengthy reference at the CII's AGM to the famous economist John Maynard Keynes had been misunderstood. He said the Prime Minister was not telling Indian industrialists to follow the 19th century moral precepts, but simply suggesting that industrialists must form a social compact with society even if its outline and terms was substantially different to the social compact that existed in the 19th century.

The Prime Minister's remarks at the CII event stirred the hornet's nest, drawing sharp reaction from industry and becoming the subject matter of wide editorial comment.

Two aspects of Dr Manmohan Singh's statement which got embroiled in raging controversy related to his advice to industry to desist from the practice of drawing excessive emoluments and preventing cartelisation.

Dr Ahluwalia said certain types of market behaviour were undesirable and there was a need to prevent this from happening.

The well-known economist was critical of promoters of family-owned companies which pay themselves massive salaries, often at a time when their company was witnessing shrinkage of profits. On May 28, a financial daily published on its front page a list of such promoters, their companies, their salaries and their company profits.

Dr Ahluwalia clarified the Prime Minister did not mean to suggest that there should be any restraint on company profits when he told the Confederation that 'profit maximisation should be within the bounds of decency and greed." He was, however, unclear as to whether the New Company law would lift caps on Director-level salaries. It is widely speculated that this will happen, but after the Prime Minister's landmark speech, the corporate gossip market is rife with the belief that this may not happen. Dr Ahluwalia, however, threw no fresh light on the issue.

He said the focus of the government's activity will be the development of the infrastructure sector, which is now clearly understood to be the biggest stumbling block in the way of promoting growth and industrial activity.

UNI