The Hindu : Karnataka / Bangalore News : New governments should not ignore reforms: trade bodies

Online edition of India's National Newspaper
Friday, May 14, 2004

Karnataka

Karnataka - Bangalore

New governments should not ignore reforms: trade bodies

By Our Staff Reporter

BANGALORE, MAY 13. The new governments in the State and the Centre "should not allow the reforms agenda to take a back seat," said various trade bodies in the State here on Thursday.

The Federation of Karnataka Chambers of Commerce and Industry (FKCCI), the Greater Mysore Chamber of Industry (GMCI) and the Karnataka Association of Small Scale Industry also said a "more balanced development agenda" would have to be adopted by the new Governments.

The GMCI, in a release, said, "The election results are no doubt of concern to industry as there is a likelihood of political instability at least for a few months.

"The worrying factor is that economic growth may be affected if equal importance is not given to the rural economy. The governments should keep this in mind.

"The election verdict is a clear message to the political parties that they have ignored the needs of the common people and that they have sidelined the aspirations of the small and medium enterprises leading to unemployment.

"The previous governments were not able to protect the interests of farmers in the post-WTO regime."

The overemphasis on information technology and knowledge economy was also a factor responsible for this reversal.

It should be understood that information technology was an enabler and that manufacturing sector was the one that could contribute to employment generation and balanced economic growth, the release said.

In the short term, the markets could send adverse signal to foreign institutional investors and there could be a reduction in foreign direct investment inflows.

The projected GDP growth of eight per cent might not be easy to achieve, the release said.

In the State, parties with different ideologies could come together to form a government. A common policy was needed.

In general, the electorate did not seem to want too many reforms that were perceived to be urban-oriented, neglecting the rural sector.

This had resulted in all pro-reform leaders losing their seats, the release said.

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