The Hindu : New Delhi News : "Create sense of urgency for reforms''

Online edition of India's National Newspaper
Monday, Apr 18, 2005

New Delhi

New Delhi

"Create sense of urgency for reforms''

Staff Reporter

Murthy says India cannot ignore world market "Dynamic industry sector can significantly reduce poverty''

NEW DELHI: : Describing it as the "moment of truth'' for the country, Infosys Chairman and Chief Mentor N. R. Narayana Murthy on Sunday said there was a need to "create a sense of urgency for reforms'' and make choices that may be unpopular but necessary to drive reforms. Addressing students and faculty at the 39th Convocation of the Indian Institute of Foreign Trade (IIFT), the Infosys chief quoted economist Stephen Roach's lines, "India must grasp the moment, and light the fire'', and noted World Bank estimates that with the right trade reforms and competition-friendly policies, India could grow at double-digit rates.

Calling for greater openness to trade, Mr. Murthy said India could not ignore the world market in today's era of globalisation and falling geographic and regulatory barriers. "For India to play a central role in world trade, the Indian industry must be able to compete globally. Consequently, India must first and foremost encourage competition by opening up industry to foreign investment. This is key to achieving global labour and capital productivity standards across Indian industry,'' he said.

Describing the Indian business climate as highly restrictive - according to the World Bank, he remarked: "It takes 89 days to open business in India, 425 days to enforce a business contract, and ten years to close business. India's inflexible labour laws discourage investment and job creation.'' While pointing out that a key contributor to the country's poverty was the over-dependence on agriculture, Mr. Murthy said a dynamic industry sector can significantly reduce India's population burden on agriculture and reduce poverty.

Urging the students to put public good ahead of private good, Mr. Murthy told the students to work towards creating a climate of opinion that focuses on putting long term growth ahead of short term benefits.

Speaking on the occasion, the Union Commerce Secretary, S. N. Menon, said the strengthening of Indian exports is a reflection of an enhanced international competitiveness, especially in the services trade. "India's export of services increased from 4.9 billion to 25 billion dollars between 1992 and 2003. During the financial year 2004-2005 software services witnessed an annual growth of 36 per cent besides an impressive growth in the traditional services such as travel and transportation,'' Mr. Menon said.

While pointing out that with increasing toward orientation of the domestic industry the business risks are also increasing, Mr. Menon said the ``recent developments in the multilateral trading environment leave no scope for complacency by India and all developing countries''.

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