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‘Organise to compete globally’

JODHPUR: Prime Minister’s Economic Advisory Council chairman C. Rangarajan on Saturday asked industry to get organised to compete with the rest of the world in tariffs and quality. The changes that have been effected in the foreign trade and foreign investment policies have altered the environment for the Indian industries and it is necessary that they identify existing areas of competitive advantage to them at global level. “We are living in a time of far-reaching changes,” he added.

“The path of transition is, no doubt, difficult. A greater integration of the Indian economy with the rest of the world is unavoidable,” said Dr. Rangarajan addressing the Convocation of the Aravali Institute of Management here.

“We must recognise that there are many countries which are knocking on the doors of the WTO to enter,” he said.

While the safeguards available in the WTO agreement must be fully utilised to protect the interest of Indian industries, the sector also should be forward-looking to meet the new challenges. The Indian Government would ensure that the industries do not fall a victim to unfair trade practices, he said.

Former ruler of Jodhpur Gaj Singh handed over the diplomas to the successful students while Director of the InstituteVarun Arya presented the annual report.

“India must take a proactive stand in trade negotiations and articulate its own demands focusing on what it wants from the global trading system, such as prohibition of unilateral trade action, establishing symmetry between the movement of capital and natural persons and zero tariffs in industrialised countries on labour-intensive exports of developing countries,” said Dr. Rangarajan, a former Governor of the Reserve Bank of India.

While the policy decisions in the recent past had been attempting to create a macro economic policy environment conducive for rapid growth, it was for the industry to recognise the greater demand of enterprise in the new century, he said.

“They have to learn to swim in the tempestuous waters of competition away from the protected swimming pools. India is no longer a country producing goods and services for the domestic market alone. Indian firms are becoming and have to become global players,” Dr. Rangarajan said. According to him, the country’s ascendancy in information technology was only partly by design though the policy makers could take the credit for making the policy environment industrial friendly once the potential was discovered.

“In today’s environment, the primary focus has to be on strategy and quality of micro economic business management and the goal must be to achieve higher levels of efficiency and productivity. A new productivity culture must emerge and with it an organizational structure and incentive system that promote productivity,” Dr. Rangarajan said.

Analysing India’s competitive advantage over China, Dr. Rangarajan said the observation that China fared badly in the area of flexible manufacturing should be taken note of.

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