P.M.'S KEY-NOTE ADDRESS AT THE CII PLENARY SESSION

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The Prime Minister, Shri Atal Bihari Vajpayee delivered the key-note address at the National Conference and Annual Session of Confederation of Indian Industry, here today. The theme of the Conference was "Going Forward : Big Ticket Growth or a Mild Recovery". Shri Sanjiv Goenka, President CII and Shri Ashok Soota, Vice President CII were among those present on the occasion.

Following is the text of Prime Minister’s the key-note address:

"I thank you for inviting me for the concluding session of this annual conference of CII.

Before I begin, I must confess that, unlike some others, I am unable to see the deep symbolic meaning attached to the inaugural and concluding sessions of a CII conference. If invitations to inaugurate or conclude conferences could make them speculate about an impending change in the direction of the political winds, then I must say that such people seem to think that chambers of commerce and industry have more powers to make and unmake governments than the people of India.

Politicians are not expected to know the art of doing business. But if there is one thing that we should learn from you, it is this: It does not make business sense to count one’s chickens before they are hatched.

When the people of our country elect their Parliament, they expect it to run for five years. Those who have the people’s mandate to govern are expected to discharge their responsibility well. And those who have been mandated by the people to sit in the Opposition are similarly expected to play their due role.

When the time comes to elect a new Parliament, everyone has a chance to go back to the people. Whatever the people decide is supreme in a democracy.

Attempts in recent years to destabilize governments, often those that had the support of the destabilizers, have neither helped the cause of business, nor have they done any good to our democracy.

This is what I tried to convey the other day, while flagging off the celebrations to mark 150 years of the Indian Railways — that let everything run on its proper tracks. Let there be no derailment of anything anywhere.

I wish to tell this gathering of businessmen that our Government cannot be derailed. It is stable. It is here to stay. And it is here to stay for its full term. You will continue to do business with us, and we will continue to do business with you.

Friends, it was not my intention to impart a political tone to my speech this evening. But the climate of debate in our country in recent months has become so highly vitiated — by half-truths, exaggerations, and polemical assertions — that even the CII platform was not spared.

Naturally, the business community cannot remain unaffected by what is being said and written about our country — both within and without. It is one thing for all of us within our country to wake up to the wrongs that have happened and to correct them — with determination, diligence, and unity. But it is quite another to engage in such a shrill and divisive campaign that it presents a picture of national disunity and encourages outsiders to start giving us sermons.

Let me be specific. The recent communal violence in Gujarat has shocked and traumatized all of us. I have perhaps spoken for the entire nation by describing it as a blot on India.

But it doesn’t help anybody, if the complexity of the situation is ignored. It doesn’t help the interests of our country; it doesn’t help the cause of secularism; it doesn’t even help the interests of business if we forget that the violence in Gujarat is but a temporary aberration, and not a fundamental fissure in our society.

I am, therefore, astonished when I hear some people ask: "Of what use is the consensus among major political parties on economic policies when the fault-line is deep, when there is a fundamental difference of opinion on the very nature of the Indian nation-state, on the very character of our society?"

Those who proclaim that India’s secular moorings and foundations are being systematically destroyed, do not know how deep and strong the roots of our secularism are. They only display their ignorance of India’s history and of the cultural wellsprings of our nationhood by painting such an alarmist picture. They forget that Indian secularism has withstood even the catastrophe of Partition, which was effected on communal lines.

Yes, a tragedy is a tragedy. Let no one belittle the crime that has been perpetrated in Gujarat — either in Godhra or elsewhere. As far as the Government is concerned, I have said this before and I repeat it today — the inquiry will be fair and the guilty shall not go unpunished, irrespective of the community or the organization that they may belong to. At the same time, let no one use this tragedy to make such sweeping generalizations about the happenings in India that they demoralize Indians and present a wrong picture of India abroad.

I am confident, and I want you to share this confidence, that we shall weather the current crisis in Gujarat, just as we have overcome many a crisis in the past.

• Let all of us believe in India.

• Let all of us believe in India’s resilience.

• Let us introspect and rediscover our oneness.

• Let us reaffirm that we are one people, despite all our diversities. Even the Preamble of our Constitution, starts with the proclamation, "We the People of India …" and not "We the Peoples of India".

• Let us not forget that ours is one national culture that integrates the many proud cultures that have nestled in our land.

I am saying all this to an audience of businessmen, because you too have a responsibility to project the correct picture of what is happening in our country, both here and abroad.

Distinguished businessmen,

I now turn to the theme of your conference. "Going Forward: Big Ticket Growth or a Mild Recovery". I think that it is not necessary to go forward to get to a mild recovery; the economy has already overcome the recent slowdown and achieved more than a mild recovery.

From a low of 4 percent GDP growth two years ago, our economy is expected to grow by 5.4 percent in the last financial year. This year, it is expected to do even better — above 6 percent. The Global Economic Outlook of the United Nations has just predicted an annual growth of 6.4 percent in 2003, which will make us stand second only to China on the growth chart. Inflation is under check. Forex reserves are at a record high. Indeed, our high growth potential and our reasonably good performance have attracted the world’s attention. Combined with our many foreign policy initiatives, this has raised the stature of India in the world. Hence, there is no need at all for either diffidence or despair.

If we have to go forward — and I have no doubt that we will go forward — we should aim at a faster recovery and march rapidly towards what you businessmen like to call "big ticket" growth. Therefore, when our Finance Minister Shri Yashwant Sinha talks about our determination to achieve 7 or 8 percent GDP growth, he knows that he has his feet on the ground.

Here again, I would say, "Believe in India". And I would add; "Believe also in our Finance Minister".

How do we go forward to achieve those ambitious growth rates that all of us have always wanted our country to achieve, and that are absolutely necessary to make a big dent on poverty and unemployment? In the past half-century, a sustainable 8 percent GDP growth seemed in the realm of fantasy. But now, we are getting closer to it. I have no doubt that India will cross this milestone in the Tenth Plan that has just started.

Whatever India has achieved in the past few years is well known to you. Indeed, some of these reforms were unveiled after extensive — and, may I add, unprecedented — consultations with representatives of the business community. For example, the telecom and IT sectors have already started to show the fruits of reforms in a big way. And these fruits have begun to reach the common man. Telecom tariffs are down. And almost one thousand new telephone subscribers are being added every hour. These are the fruits of the National Telecom Policy of 1999, which, incidentally was opposed by much of the Opposition.

Similarly, several ambitious infrastructure projects are being implemented today. The National Highway Development Project will soon change the face of Indian roads. Its counterpart in the rural sector, the Pradhan Mantri Gram Sadak Yojana will similarly bring lakhs of unconnected and ill-connected villages to the national and global market. I assure you that the Golden Quadrilateral part of this project will be completed by the end of next year.

The fall in interest rates has helped industry across the spectrum. Its most dramatic impact can be seen in the big jump in housing finance loans. I am told that as much as Rs. 13,600 crores have been loaned in the nine months from April to December last year for constructing new houses — and that was before competition hotted up in the housing finance market. Road and house building activities have started to create lakhs of new employment opportunities. Many more job opportunities will be created as private insurance companies start their operations.

Shri Sanjiv Goenka has made a reference to the opening up of unconventional areas such as defense production to the private sector. I assure you that we shall encourage public-private partnership in every area of economic activity. I may add that the newly-adopted National Tourism Policy as well as the National Health Policy give pivotal importance to this partnership approach with the private sector.

So, a lot of good things are happening in our economy. Let not the temporary disturbances in Gujarat cloud this basic fact.

Friends, Parliament is in session and therefore you will understand that I cannot make any specific announcements. But I can tell you that we have embarked on a major review of the system of implementation of all the policies and programs of our Government. I am as aware as all of you are about the many shortcomings in this regard. These shortcomings are not the makings of our Government. They have been plaguing the economy for several decades. The more I look at the system of implementation, the more it appears like a big and complex machine whose many parts are clogged, are rusty, and are either under-performing or not performing at all.

For example, the weaknesses in our judicial system continue to hurt the climate of investment and business — both domestic and foreign. We are therefore thinking of investing in the judiciary in a big way — for upgrading the facilities in courts, for appointing more judges, and for streamlining procedures. We also need to identify and remove perverse incentives for resorting to unwanted litigation, which is at the heart of the problem of the clogging up of the judicial machinery.

Power sector reforms have proved to be another difficult nut to crack. It is not that we have not tried. Our efforts have produced a large degree of consensus among state governments about what needs to be done. They now need to convert that consensus into concrete action. The Ministry of Power, together with the Ministry of Finance have chalked out a bold initiative to improve the health of State Electricity Boards. I appeal to all the state governments to show determination and urgency in implementing the agenda that they have already agreed upon.

Civil service reforms are another important area for improving India’s index of implementation. I have faith in our bureaucracy’s abilities and dedication. A motivated, professionalized civil service can do wonders, and all of you know it. What is needed is a change in its attitude, its knowledge-base, and its work culture — to make it passionately result-oriented. Many bold steps are needed to achieve this. As a first step, we want to bring more professionals to work in the government at various levels. The appointment of the new power secretary testifies to this commitment. A second step will be the enhancement of the skills of civil servants, and matching skills and knowledge to responsibilities.

Public sector undertakings continue to form a significant part of our industrial and service economy. However, these are required to work in the new competitive environment, while still being shackled by old systems and procedures. Conversely, they have also been provided with a large number of crutches. In my interactions with PSU chiefs, I have heard all of them say that the lack of a level playing field is the main obstacle in achieving better returns on the enormous public investments made in their units. The time has come for liberating our PSUs from all unnecessary shackles, and then removing their crutches.

I would say that all these and other imperatives together constitute Governance Reforms that are long overdue. We need these reforms both at the Centre and in states — to consolidate our achievements and to tackle our diverse problems. All state governments, irrespective of the parties that run them, have some achievements to their credit. All are also saddled with many problems. What is needed is greater sharing of experiences — of successes as well as setbacks.

As far as I am concerned, I do not make any distinction between the achievements of one state and the other, based on who is running them. The successes of Andhra Pradesh and Tamil Nadu are as important to me as those of Madhya Pradesh and Rajasthan. For, ultimately, these are the successes of India. Similarly, the problems of Karnataka and Kerala bother me as much as those of Himachal Pradesh and Orissa. For, if India is to achieve "Big Ticket Growth", we have to overcome the problems faced by all our states.

Which is why, I have been trying to drive home one overriding message — namely, in matters of national security and national development, there can be no place for politicization. The need of the hour is Consensus and Greater Consensus; Partnership and More Partnership.

• Consensus among political parties.

• Consensus between the Centre and the States.

• Partnership between the Government and Business.

• Partnership between the Government and the People.

In the end, I wish to return to the main theme of my address. India’s secularism is too deep to be blown off course by temporary turbulence. The Ship of the Nation is strong and reliable enough to weather all storms and will soon leave the present turbulence behind. Now, more than ever, is the time when we should return to the agenda of development. Now, more than ever, is the time when we should focus on the big opportunity that is beckoning us.

With these words, I conclude my remarks and extend my best wishes to the Confederation of Indian Industry.

Thank you."