M A I N   N E W S

Vajpayee woos US investors
Key sectors to be opened  * PMO to monitor projects
From Hari Jaisingh

NEW YORK, Sept 13 — Exuding an open arms policy, Prime Minister Atal Behari Vajpayee called upon the captains of industry at the US-India Business Summit here today to accept a target of $ 5 billion foreign investment flows in 2001 and treble it to $ 15 billion in the next three years.

Though the Prime Minister admitted that this figure was ambitious taking into account the actual flows from American investors over the last 10 years, he maintained “it is, however, achievable.”

Emphasising that the comprehensive process of reforms was irreversible, Mr Vajpayee impressed upon American business to take a long-term view, considering the “magnitude of opportunities and rewards as they will unfold in the future.”

To overcome the general perception in the West that there were “hassles of doing business in India,” the Prime Minister disclosed he was creating a Strategic Management Group (SMG) in his office where difficulties encountered by large investment projects will be speedily resolved. An inter-ministerial cell will assist the SMG will report to Mr Vajpayee directly once every month.

As a number of the project-related problems concerned state governments, Mr Vajpayee said he was urging the Chief Ministers to take a similar initiative. “I am sure this will impart some momentum and seriousness to address implementational concerns,” he observed.

Underlining the need to harness the “complementarity of India and the USA,” Mr Vajpayee stressed that the “reform process in India is on an irreversible course.” Discussions and differences within and across parties were natural in a democratic polity. He said his government also wanted to alter the focal points of change because of which the reforms were being perceived less and less as being elitist-driven.

The Prime Minister pointed out that several new opportunities had been created for private investment in critical sectors like infrastructive, information technology, telecom and power. What united India and the USA was the perspective in which private enterprise was given the maximum encouragement by the State thereby limiting its own role to that of a “facilitator and impartial regulator.”

To buttress his point about the tremendous openings for private investment, Mr Vajpayee said a new Electricity Bill, 2000, which significantly deregulates the power sector, was on the anvil. The proposed legislation will enable greater consumer freedom and help the private sector in taking decisions on generation, transmission and distribution by unbundling them.

Alluding to complaints in respect of power projects in the past, the Prime Minister was categorical that “we shall address these squarely. Power requires huge investment in India to meet our energy needs.”

He said depoliticisation of tariff fixation and its acceptance by many state governments provided fresh opportunities for private and foreign investment. He expected several important commercial agreements to be initialed during his stay in Washington.

Side by side, the regime for direct foreign investment had now been made automatic. Sectoral caps were under constant review by a Group of Ministers. “I expect further relaxations in many areas shortly.”

Further, Mr Vajpayee said there had been a massive deregulation to ensure investment opportunities in infrastructure. India had a world class information technology policy. The IT and other knowledge based enterprises offered the greatest opportunity for a mutually beneficial partnership between Indian and American business.

India enjoyed the professional manpower to truly maximise the benefit from the new economy. The number of IT professionals were being doubled in one year and tripled in three years.

Collaboration between Indian and American educational institutions would be encouraged for joint research and training. Private and NRI investment in education — especially in technical and higher education — would be promoted.

There was total deregulation in the telecom sector and a Telecom Convergence Bill was in the offing. The government was also considering how best to deregulate cellular telephony completely.

The Prime Minister drew attention to the 13,000 km of improved and expanded national highway in the next seven years, corporatisation of ports and private participation in port buildings being welcomed and according high priority to financial sector reforms.

Mr Vajpayee said disinvestment had received the government’s close attention. “We now have a credible disinvestment programme. During the course of this year there will be a significant disinvestment of some major companies covering the sectors of oil, telecom, airlines and hotels.”

He declared that the resources realised would be mainly utilised to retire debt or to meet social sector obligations. He was candid in acknowledging that serious problems did exist in many areas, particularly long-term fiscal management. Simultaneously, tax reforms required urgent attention as well, and the Double Taxation Treaty must be revised.

In his own style, Mr Vajpayee, in extending an unhindered invitation to American business to be an active participant in India’s economic development, said: “In short, there are enormous opportunities. There are, no doubt, problems and risks of investment. I, however, venture to suggest that the opportunities far outweigh the risks. The problems and risks will ease with opportunity and create a conducive environment to grow,” he added.

In seeking the partnership of American business in fostering the change for India’s prosperity and realising the common dream, the Prime Minister declared, “We are determined to ensure that the benefits of reforms do not bypass the common man.”

PM arrives in Washington

WASHINGTON, Sept 13 (PTI) — Prime Minister Atal Behari Vajpayee arrived here today from New York on his first official visit amidst a new warmth in Indo-US ties and American concern over the situation in Kashmir where it wants an immediate ceasefire.

The four-day visit of Vajpayee is viewed by both sides as an opportunity to build on the successful visit of President Bill Clinton to India six months ago. Terms like “natural allies” and “shared vision” are being liberally used by officials on both sides.

On the eve of Mr Vajpayee’s arrival, the US concerns over the situation in the sub-continent were made amply clear by a spokesman of Clinton’s National Security Council who said Kashmir would be among the many things that the two leaders would talk about.