The Hindu : New Delhi News : Call for privatisation of public sector units to boost growth

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Call for privatisation of public sector units to boost growth

Special Correspondent

Indian Liberal Group for greater employment generation with labour reforms

NEW DELHI: The Indian Liberal Group (ILG) on Friday called for vigorous disinvestment and privatisation of public sector enterprises and greater employment generation along with labour reforms.

It stressed the need for achieving growth in agriculture, while bringing the sector under the tax net as part of its 15-point package of initiatives for the Government's consideration.

In a document titled `Liberal Budget 2007-08: Taking Reforms to the Poor,' the fourth such in its annual series, the ILG sought to project the liberal viewpoint on all matters pertaining to the economy and budget-making so that the benefits of the high GDP growth and various reforms reached the poor and became "inclusive" instead of widening the disparities.

Highlighting the initiatives suggested, at a seminar organised jointly by the ILG and the Press Institute of India here, Sunil Bhandare, economist and chairman of the drafting group of the Liberal Budget (called LB4), said the country's growth would depend on the acceptance of liberal values and the promotion of free enterprise. In this respect, "it [LB4] is a structure of fiscal management with a view to achieving maximum welfare of the community within a democratic framework."

In its document it said economic reforms by the UPA Government were being diluted due to constraints of coalition politics, particularly by "attacks from the Government's own Left Front allies."

Economic reforms

To put the reform process back on track, the Group stressed that disinvestment and privatisation of PSEs should be pursued vigorously to mop up about Rs. 35,000 crore immediately and about Rs. 50,000 crore in the next three to four years.

On the labour front, it said reform of obsolete labour laws was essential while introducing flexibility. Only then would 10 million jobs be created annually to help tackle the unemployment problem. As for agriculture, the laggard that has been impeding faster growth, it urged the formation of special zones to promote the farm sector. At the same time, it has formulated a scheme for taxing agricultural income as an integral part of the Income-Tax Act.

Another major suggestion pertains to fiscal discipline as envisaged in the FRBM Act. Terming the legislation sacrosanct, it rejected "any compromise" on this score, except in the event of a fiscal emergency or unprecedented counter-cyclical considerations.

Turning to poverty alleviation, the ILG said such programmes should assume centre-stage in the Government's scheme of things.

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