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FICCI confident of 10 p.c. growth

By Our Special Correspondent

NEW DELHI, APRIL 10. The Federation of Indian Chambers of Commerce and Industry (FICCI) today expressed confidence that a ten per cent average growth rate is possible over the next decade if concerted efforts are made to sustain the process of economic reforms. According to the FICCI President, Yogendra K. Modi, "For achieving this goal, FICCI has worked out a detailed model with action plan for the next five years".

Addressing a national conference on Reinventing Indian legal system to achieve double digit economic growth, he added the rider that such a growth rate cannot be achieved without major reforms in the legal and judicial system. Noting that economic reforms over the last decade have injected a new vigour to the Indian economy, he said the GDP growth in the current fiscal has crossed 8 per cent, giving a major push for a `take off'.

Regarding the need for legal and judicial reforms, he said companies today have to incur major expenses to ensure compliance of innumerable laws. Owing to the complicated system, he said compliance was not easy and often these laws pushed companies into avoidable litigation, sometimes over trivia. He felt that the huge unnecessary legal expenses added to the cost of operations just when companies were struggling to take on global competition.

He also noted that new projects and expansion plans especially in greenfield areas were delayed because of numerous laws and compliance requirements. "This slows down the process of investment which indeed should be the key objective if we want to achieve a ten per cent growth rate," he said.

In addition, he said the confidence of foreign investors in the business environment suffered because of delay in delivering justice despite the fact that India has one of the fairest judicial systems in the world. "We have around 3000 central statutes of which about 450 deal directly or indirectly with economic and commercial decision making," he said.

Mr. Modi felt that the time was now ripe to revisit these laws as numerous of them had become redundant and outmoded while others have to be simplified, rationalised and updated. In this context, he suggested that a separate insolvency act be passed on the lines of the U.S. Bankruptcy Act and thus simplify the whole winding up process. This would help in reviving companies quickly and allowing others to wind up so that assets could be re-used for productive purposes, he said.

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