Small and medium enterprises will soon have a new forum
The United Progressive Alliance Government's flagship project Food Security Bill won't be enough to ensure food accessibility for the poor, said the Chairman of the Federation of Indian Chambers of Commerce and Industry (FICCI), R. V. Kanoria.
He said that the whole system of agricultural production and marketing needed to undergo drastic changes. Subsidising food for the poor could lead to farmers getting less money for their produce, he said, and called on state governments to reform agricultural marketing set-ups.
Food deficiency could not be addressed by offering subsidised food. Food production had to improve drastically, he added. To this end, the apex chamber was preparing a white paper on Indian agriculture, which would be ready for release in September, Mr. Kanoria told an interactive session at the Kerala Chamber of Commerce and Industry here on Wednesday.
Mr. Kanoria, the first FICCI Chairman to visit Kerala in nearly a decade, said that small and medium enterprises (SMEs) would soon have a new forum, which will exclusively address problems facing SMEs.
The SMEs faced an array of difficulties that included insufficient credit flow. Mr. Kanoria said that a recent SME conclave in Delhi highlighted the problems confronting the sector and called on banks and financial institutions to evolve a new strategy to ensure credit flow to SMEs. Instead of a collateral-based credit system, banks must take up a cash-flow-based system of extending credit, he added.
One-time amnesty
Mr. Kanoria called on the government to provide a one-time amnesty to those who had stashed away money in Swiss banks. Conceding that there was a moral compromise in this, he pointed out that the U.K. and Germany gained substantially from such a scheme.
Selling off of the shares of Coal India should help infuse money into the system and help India's efforts to catch up with power generation requirement. Power generation was not in tandem with growth target set by the country, he said.
Protectionism
There was a resurgence of protectionism across the globe with the onset of economic recession in 2008. Politicians tended to think globally but acted locally. This must change, he said, to allow the free flow of goods and services. Technical barriers were now being raised to prevent this free flow even as the process of globalisation was considered a positive impact on global economy, he said. Mr. Kanoria said the government was under pressure due to continuing inflationary tendencies, mounting current account deficit and rising price of crude oil. Though he did not expect crude prices to go beyond $120-130 a barrel, he felt the price level would affect the balance of payment situation. Under these circumstances, he said, the government would not be able to take bold decisions in the budget.
The Hindu
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