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Second generation reforms needed in various sectors: Assocham
November, 23rd 2011

Reminding the UPA-II government about the need to reverse the negative perception of a 'decision-making paralysis', industry body Assocham today made a pitch for second generation reforms in various sectors, including finance, banking, taxation and agriculture.

The negative perception of a 'decision-making paralysis' within the government must be reversed now, or else the opportunity would slip by, the Associated Chambers of Commerce and Industry of India (Assocham) said.

A uniform Goods and Services Tax, with a simplified and long-term Direct Taxes Code, can electrify business prospects, it said. This will restore business confidence and bring in foreign investors looking for robust bond and corporate debt markets, the chamber said in a statement.

Early implementation of market-driven pricing of oil products is imperative to reduce subsidy outgo and conserve oil and gas resources. The government must announce deadlines for introducing inclusion programmes like food security, universal healthcare, insurance and housing as well, ASSOCHAM said.

"This should help in re-connecting with people at large amid corruption scandals and perception of policy paralysis. It is important to gain people's confidence that the United Progressive Alliance means business. However, ways beyond tightening monetary supply must be explored to control upward spiralling inflation," it added.

The government must find a workable formula to acquire land for industries and create urban clusters, the chamber said.

The draft Land Acquisition Bill and R&R Bill should instill confidence among urban infrastructure developers, with the urban population set to reach half a billion by 2020-end, it said.

At the same time, the proposed law should compensate farmers with reasonable returns and they should be made partners in the process through employment and business opportunities, it said.

There cannot be a compromise on the 9 per cent-plus GDP growth target if poverty is to be reduced, Assocham said, adding that the linkage between the growth rate and poverty reduction was getting diluted in the public perception due to many external factors.

The growth-inflation conundrum has to be cracked and supply side issues must get precedence over monetary measures. In this context, multi-brand retail and supply chains with significant foreign investments would energise both farms and industries, as well as pull down consumer prices, it said.

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