The Hindu : Tamil Nadu News : Entrepreneurs not ready to invest for future: Jaswant Singh

Online edition of India's National Newspaper
Friday, Sep 24, 2004

Tamil Nadu

Tamil Nadu

Entrepreneurs not ready to invest for future: Jaswant Singh

By Our Special Correspondent

COIMBATORE, SEPT. 23. Indian entrepreneurs are not ready to invest for the future but are bent on booking profits "today itself" because of certain taxation glitches, Jaswant Singh, former Union Finance Minister, said here today.

Taxation issues contributed to discard in certain sections of the economy, which led to such a situation, he said.

He was addressing a joint meeting of the members of the Southern India Engineering Manufacturers Association (SIEMA) and the Institute of Company Secretaries of India on the "competency and competitiveness of Indian industry for global trade."

He exhorted the domestic industry not to remain content with the earnings from low-end of technology, leaving their full potential of enterprise untapped.

Citing instances, he lamented that the plantation industry began milking the sector without investing for the future, forcing the National Democratic Alliance Government to institute a Rs.500-crore price stabilisation fund.

Besides "SSIs want to remain SSIs perpetually because of the taxation benefits." Cotton yarn exported substantially from India, mainly to China, denied an opportunity to the indigenous industry to add value to the textile sector. But, with the raw material from India, China was able to flourish because it was able to go in for value addition, Mr. Singh said.

Price fluctuation

When one of the SIEMA members pointed out the raw material price fluctuation, which was causing consternation among the manufacturing industries, Mr. Singh admitted that it was due to the aberration in the taxation policy related to the customs and excise duties. "This needs to be addressed."

Referring to the differences of opinion affecting the Central Government on foreign direct investment (FDI) in certain sectors, he said, " it is due to the current political arrangement in government formation that the ruling United Progressive Alliance had chosen to have with the Left parties." He was certain the kind of discard seen today would continue. At the same time, he admitted investment in "certain areas of strategic interests sensitive to larger sections of citizens" should be carefully looked into.

"Investment in countries like the U.S. in areas like media or television companies by persons other than the natural U.S.-born citizens is not possible. Similarly, in India, sectors like agriculture cannot be just treated as mere agriculture, as it is a way of life. Hence, granting FDI in agricultural land will be totally incorrect," he added.

Mr. Singh, who pointed out the subsidies granted to various sectors by the developed countries, contended "nobody has any right to question us when we give subsidy for agriculture."

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