'Govt must remove all procedural delays affecting domestic industries'

FTRST PERSON/ RAMESH DATLA

Ramesh Datla, the chairman of the Confederation of Indian Industry (CII)-Andhra Pradesh chapter, is optimistic about the future of the Indian economy, but is skeptical about the bureaucracy.

He believes that there are some areas like tax structures and procedural delays that require a relook.

Incentives, he adds, may not always be the only way to develop the economy, whether it is the agricultural or the industrial sector. Speaking to Business Standard, he gives his views on the issues affecting industries today and his take on the state and the central government's efforts in this regard.

What, according to you, are the major issues affecting the Indian industries today?

The zero duty regime and the tax structures are the major issues affecting the domestic industries today. This apart, customs clearance also takes a long time in India today.

While customs clearance takes about 6-12 days in India, it takes less than eight hours in countries like Singapore and Malaysia. The government needs to turn its focus towards such procedural delays that affect the operations of domestic industries.

Is the government doing its bit in solving these problems?

We have been making representations to the government. The Centre has invited the industry associations on December 14, 2004, for a discussion on such issues.

There will be discussions, but what needs to be seen is whether implementation takes place.

Everybody knows the problem with the Indian bureaucracy. We have, therefore, reached a stage today, where we have begun to believe that the government will try to make amends only after the damage is done.

How has the new state government's stand towards the industrial sector been?

The new Andhra Pradesh government is positive towards the industry and has been continuing with the policies followed by the previous government. Initially, we were skeptical because of its pro-agriculture stand but we now understand that industries will not be neglected by it either.

Are there any policies of the new state government that you think needs a relook?

There is a problem with the free power issue for the agricultural sector, as we believe that the benefits will not reach the people who actually deserve it. It will benefit only the well-to-do farmers and not the farmers who do not even have the money to buy a pump.

Besides, subsidies like the reduction in sales tax on aviation turbine fuel for attracting airlines may not be very beneficial for the government in terms of revenues in the long run.

Another issue that we need to think about is whether the existing airport will be able to handle the increasing number of flights and traffic from March 2005, as the international airport at Shamshabad is likely to start operations only in 2008.

How is the state performing vis-à-vis its counterparts in the country?

Today, Andhra Pradesh is growing in areas like pharma, IT and power. In fact, the state is among the highest power generating states in the country.

However, we lag behind in areas like agri-based industries, engineering and automobile industry. The government has not been giving sufficient thrust to these industries.

The automobile industry, for instance, has developed in belts comprising Gurgaon, Hosur, Chennai and Bangalore because of the existence of ancillary industries. The government of those states had given incentives to attract companies to set up ancillary industries.

However, no automobile manufacturing company is keen on setting up a unit in Andhra Pradesh because of the absence of ancillary industries. The government, therefore, should work towards developing this area.

So should the state government also provide incentives for setting up ancillary industries in the automobile sector?

I am not sure if providing incentives is the solution to the problem as other states are also providing incentives. It, therefore, becomes difficult for Andhra Pradesh to convince the manufacturing companies to set up units in the state. The fact is that we missed the bus when we had the opportunity.

What are the events that the CII is planning for the state in the next couple of months?

The CII will be organising a career summit on December 17-18 2004, to facilitate interface between the industries and the engineering and management students in the state.

In this month, we also plan to organise a GMP (good manufacturing practices) summit for the pharma companies. Another event that we plan to organise is the summit for Bharatiya Yuva Shakti Trust (BYST), where the youth will be encouraged to develop entrepreneurial skills through the funding provided by us.

So far, we have managed to help about 105 individuals in Hyderabad with Rs 50,000 each. We plan to invite the President of India for the function, where we plan to carry forward this programme to three new districts.