Industry associations made several recommendations for the power and petroleum sector and the revival of the economy at the Prime Minister's advisory council meeting here today.
The Federation of Indian Chambers of Commerce and Industry (Ficci), in its presentation to Prime Minister Atal Bihari Vajpayee, suggested the setting up of a task force to monitor the impediments affecting the power and petroleum sector.
Ficci was represented by itspresident R S Lodha and senior vice-president A C Muthiah in the meeting. Lodha, as well as Confederation of Indian Industry (CII) president Ashok Soota, said the economy was turning around and the feel-good factor was coming back because of the initiatives taken by Vajpayee, who was committed to making the country competitive.
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Soota said the Petroleum Regulatory Board should be set up as soon as possible, and should be truly independent. On a specific suggestion related to the Electricity Bill, he said the key to power reforms was state-level action.
The CII president suggested that the standard policy framework, including tariff and user charges, should be jointly prepared with state governments in order to adopt and implement a uniform standard across the country.
Ficci said state governments were levying duty and cess on the consumption and sale of electricity, including captive generation, thus restricting the scope of commissions to prescribe cost-based tariffs. It also suggested the provision of an overriding benchmark to look into the same.
The chamber, in its presentation, highlighted the need for a time-frame to bring tariffs in line with the cost of supply to each consumer class. This would prevent wide discretion to different commissions to continue with the existing distortions in the price of electricity, it added.
Ficci further feels that the decision on the optimum strategic storage capacity for petroleum needs to take into account the requirements of the country, given the current political scenario and the need for economic security.
To begin with, Ficci suggested a build-up of at least 15 days' requirement beyond the existing floating stock, which may be later increased to 30-45 days' need. The total cost estimated for 15 days' storage is Rs 4,700 crore.
Soota also presented a four-point agenda to increase growth and bring back the feel-good factor in the economy. Referring to the slight revival in the manufacturing sector and the difficulties faced by the services sector, especially information technology, he said there was a need to immediately address the issues affecting the common man, the middle-class and industry, and not wait till the next budget.
The second point he mentioned was to address the day-to-day hassles relating to procedures, while the third related to travel advisories and its impact on the economy.
The fourth point the CII president made was the non-performing asset (NPA) Ordinance issued recently, which went against the norms of natural justice, and was worse than the Foreign Exchange Regulation Act. This Ordinance needed urgent review by the finance ministry, he said.