New Delhi, November 21
Prime Minister Manmohan Singh today said public sector companies (PSUs) should be given greater functional autonomy and not be shielded from private sector competition.

“Going forward, our governments will have to increasingly adopt competition-neutral policies. Competitive neutrality requires that the government not use its legislative and fiscal powers to give undue advantage to its own businesses over the private sector,” the Prime Minister said.

Speaking at the BRICS International Competition Conference, Singh said the solution lies in giving public sector firms greater functional autonomy and freeing them from bureaucratic control and not in tolerating a slip in their competitiveness and then shielding them from competition.

"Unfortunately, government ownership inevitably brings with it a bureaucratic style of decision-making and the end result is that the enterprise cannot compete in a market populated by equals," he said.

Addressing the anti-trust regulatory authority officials from the five countries forming BRICS block — Brazil, Russia, India, China and South Africa — Singh said a competitive public procurement market can make bid rigging more difficult.

Stating that the Public Sector Enterprises or PSEs may have long enjoyed captive markets, he said the government’s ownership in such entities does not mean that these enterprises should be shielded from competition.

“The government may own a public sector firm and exercise the normal rights for ownership. This does not mean it should shelter the firm from competition as well,” Singh said.

Emphasising that public procurement forms a substantial slice of state spending, the Prime Minister said competitive procurement markets can help save valuable fiscal resources.

Talking about the five-country block, he observed the BRICS countries have a combined population of three billion with a total GDP of nearly $14 trillion and around $4 trillion of forex reserves.

He said the BRICS countries also face common challenges with monitoring and managing capital flows being one such challenging task in times of global uncertainties.

Singh said while India is poised to become the most significant exporter of services, China is on the path to becoming the global leader in export of manufactured goods. Besides, South Africa is ideally situated to reap dividends from the untapped growth potential of African continent, while Russia and Brazil dominate as exporters of raw materials, he added.

Going forward, our governments will have to increasingly adopt competition-neutral policies... Competitive neutrality requires that the government not use its legislative and fiscal powers to give undue advantage to its own businesses over the private sector
—Manmohan Singh, Prime Minister

New Delhi, November 21
Crisis is brewing in the Indian sugar industry with as many as 75 of the 99 private mills operating in Uttar Pradesh, including Bajaj Hindusthan, Balrampur Chini Mills and Dhampur Sugar, threatening to shut down operations. They have threatened to shut down in the wake of standoff with the state government over the high price of sugarcane announced by the administration.

The crisis is not only threatening the production of sugar in the current year, but could eventually have an effect on the prices of the sweetener in the market, especially in northern India, due to production getting stopped.

Industry representatives say 75 of the state’s 99 private sugar mills filed notices for closure by the time state Cane Commissioner’s office in Lucknow shut down for the day today.

There are a total of 122 sugar mills operating in Uttar Pradesh, of which 99 are privately owned and contribute to the majority of sugar production in northern India.

Uttar Pradesh accounts for almost a third of the country’s total sugar production. The state’s sugar output stood at 6.97 million tonnes (MT) and 7.47 MT in 2011-12 and 2012-13, respectively. The state’s Rs 30,000-crore sugar sector is its largest organised industry and sugarcane farming supports the livelihood of more than four million farmers.

What has hit the sugar mills hard is the high acquisition price set down by the Uttar Pradesh Government, which mill owners say they are not in a position to pay.

While the state government has announced a “State Advisory Price” (SAP) of Rs 280 per quintal to be paid to the farmers, the mill owners say they are not in a position to pay more than Rs 225 per quintal.

The mill owners have repeatedly written to the state government as well as the Centre to bring the situation under control, but the same has not happened, forcing them to file notices for closure of operations.

They are also unhappy over the “action initiated and letters issued” by the Cane Commissioner for starting the mills, without considering the “extremely difficult situation and problems faced by sugar mills, and without their participation in the cane reservation process”.

Banks, too, had declined to provide higher working capital loans to the sugar industry, aggravating private mills’ problems.

The millers claimed cane allotment orders were being passed and uploaded on the official website without submission of cane reservation proposals by mills.

The private mills claim they have been incurring losses in successive crushing seasons due to higher prices of cane.

They claim the cane price at Rs 280 a quintal for the common variety was very high as they still owe more than Rs 2,300 crore to cane farmers for the 2012-13 season.

This year, the mills claim, the paying capacity has come down to Rs 225 a quintal and any price above that will lead to arrears and losses to the industry. They say the balance of the SAP can be paid by the state government directly to the farmer, as they were not in a position to pay.

Chief Minister Akhilesh Yadav had on November 11 directed the private mills to start crushing from November 20. He had asked officials to take action against defaulters.

Chandigarh, November 21
India is a country of entrepreneurs and there is no scarcity of creative enterprises but that of scale. “Every vendor is an entrepreneur here. But those who hunt rabbits are rarely able to rope in elephants,” said Subroto Bagchi, chairman of Mindtree Ltd., and author of ‘The Elephant Catchers’ while addressing the aspiring entrepreneurs at Destination IT@North that concluded here today.

Future proof your city, your country, he advised, citing the examples of some of the small entrepreneurs who scaled up their operations and touched the lives of thousands of people whether it was ‘Saguna Chicken’ story of Coimbatore or ‘Seemati’ saree brand of a young widow from Cochin.

Saguna Chicken, today a Rs-5,000 crore business, was started by two brothers in a 360 sq ft shop. “While they aspired high, they did not venture into hugh factories. They rather innovated and took 20,000 farmers on their network who take care of the chickens till they grew. They have not only saved on storage and quality care but also ensured employment for 20,000 families,” said Bagchi.

There is a need to build intellectual infrastructure in order to create real differences, but it can sustain only if the third dimension of emotional infrastructure is also created around it which can enhance the memorability, Bagchi added.

He said North has the best capabilities in the field of entertainment and media having produced many star actors who reign the Bollywood and that should be channelised to make the city leader in this segment.

In the delivery of citizen-centric services, Indian cities fall to somewhere around 1.5 on a scale of 10 and that makes it equally exciting avenue to explore by young entrepreneurs
—Subroto Bagchi, Mindtree chairman

Mumbai, November 21
The rupee fell for the 2nd day against the dollar today in tandem with local equities, losing 36 paise to 62.93 as indications of an imminent tapering by the Fed Reserve strengthened the US currency.

Lower stock purchases by FIIs and sustained dollar demand from importers also put pressure on the rupee. — PTI

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