75th Annual General Meeting
December 13, 2002, New Delhi

Speech of the Hon'ble Finance Minister, Shri Jaswant Singh

Great privilege to be present here at the Platinum Jubilee of the founding of Federation.

This is a landmark and milestone in the evolution of any institution. In the case of FICCI, particularly so since the Federation has been so closely associated with the evolution and development of the Indian economy over most of the past century. My warmest felicitations and congratulations at this landmark achievement.

May I also say that I find myself surprised to be present here today? Surprised because I had read in the newspapers that I would not be attending and I belong to the fraternity which usually believes what it reads every morning. It is, however, a very pleasant surprise!

The Parliament Session and the recognition that New Delhi, Mumbai, Chennai, Ahmedabad, Kolkata, etc. have entered the budget season must circumscribe my remarks this evening. I cannot therefore delve too greatly into subjects, which interest you the most and are a part of ministerial responsibility. Earlier this month however, I did have occasion to report to Parliament, in as candid a manner as I could, on the state of the Indian Economy. In doing so our attempt was to really situate a 'mid year' review in the context of longer-term trends, structural changes and strategic challenges and choices which confront us. During the past three weeks of the Parliament Session we have also witnessed, a very significant extent of serious and purposeful legislative business being completed in the economic and financial field. Before this session concludes, I expect some more enactments.

A little earlier the consultation papers on direct and indirect taxes had been shared with our citizens.

I list this not as a detailing of pre-budget activity but rather to share with you my conviction that the economy is too serious a matter to be limited to a budget centric process in which we focus on it for a few weeks in a year and then relegate it to the pink papers and the inside pages for the rest. I do believe that constant and year long attention on all economic issues with the broadest possible public participation should take place, that it is highly desirable, and when such informed debate becomes a regular feature of our public life it will itself be an objective factor driving our economy forward.

A continental economy - on the move, to be a global competitor.

For the economy - and I use the term in the broadest possible sense - is too serious a business to be kept either entirely as preserve of any one segment: captains of industry, mandarins of high finance, practitioners of theory, jugglers of statistics or my ilk of the political class. At its simplest and most elementary, it effects us most directly, constantly and daily. At another level, our security and strategic imperatives, our place in the international community derive their central thrust from it. The first security is economic security, from that others flow. That is why it cannot and should not be condemned to a budget specific attention span.

Let me illustrate. It is my impression that the most important parts of the consultation paper on direct and indirect taxation, in the public debates, that followed, unfortunately received the least attention. I do not make this comment in a critical manner. The fundamental thrust of these reports was on Tax Administration, modernisation, computerisation, etc. I do ask myself why these aspects were generally passed over? To some extent, perhaps because every body agrees that there must be modernisation, greater computerisation, etc. etc. But why then, no discussion of the modalities or no delving into the complexities - and it is hugely complex task - of these. operations. For we are here, amongst other things, examining for the first time ever, an outsourcing of bureaucratic functions. That is why, I remain surprised. India is a powerhouse now of software solutions, of innovative approaches to computerisation. We are known the world over for the excellence of our pilotised software. I would have liked to have been: swamped with solutions, suggestions and criticism of how to do it better, faster, more efficiently with least inconvenience to the citizen. For the issue is really quite a simple one: Budget exercises alone will not really bring about any remarkable changes in our Tax GDP ratios. What can make the difference is modernisation of the tax collection machinery and a complete evasion of irritants that accompany this interface of official and the taxpayer. But I will persist. This really is the Government's expectation from the Tax Consultation Papers and was the intention in encouraging the widest possible debate on them, not simply to have the hype, which surrounds the budget, three months before the actual event.

Let me turn to a related issue: imparting a sense of the corporate into the institutions governing Company Law in India. The expansion of corporate life has in the past few years been swift. Institutions, that govern company law, have not changed as quickly. There would be unanimity that some thing needs to be done about it and obviously computerisation, which is comprehensive, will provide the answer. It will make life easier for companies but simultaneously also lead to installation of systems of data retrieval and information gathering which are workable in a scenario in which some 6,00,000 balance sheets are to be filed, processed and stored every year. This is one end of the task of capital market restructuring in the absence of which capital markets will simply not have the kind of public confidence they need.

My limited point is that these tasks, no matter how unglamorous they may be, or no matter how resistant they intrinsically are to being reduced to a headline - are nevertheless very serious business. They have to be part of any program when we speak of second or third generation reforms. To the extent that they are discussed in greater detail than presently, the Government would certainly benefit. Such a debate would moreover act as a means of reducing the distance between government institutions and the reasons why these institutions exist - which are tax papers and corporate bodies. This coming together would release the energy to deepen and propel economic reforms in India. I believe that the citizens of this country are a powerhouse of ideas, solutions, pragmatic approaches and suggestions. More than ever before since our independence, Government needs this enormous resource. I would go further and say that in a globalised environment where Indians contribute so much, Government loses by not harnessing this great energy source.

I define my task ahead in terms of seeking views, suggestions, and priorities from the widest possible cross section of society. The more contested the debate, the greater will be enriched and meaningful the process of change. The issues that confront us are far too complex and the potential we have is too great to be reduced to endless arguments about percentage changes in incidence of tax or interest rates. There are vast spaces in our economic life today that need focussed and serious attention; innovative ideas and rapid technological progress. It is of course no more than altruism to say that we live in a globalised world. The question however is how we locate and situate ourselves in a landscape in which knowledge drives industry, power production, fuels productivity and competition. In this landscape if our existing manufacturing base must grow it has to simultaneously reinvent the traditional basis of our strength and address new areas. In the former I would give Steel, and Textiles a priority. In the latter, Pharmaceuticals, Biotechnology, micro, nano technology; reach out to the frontier of tomorrow. The other great challenge is to give to Agriculture the attention that led to the remarkable success of the Green Revolution. Marrying a new generation of knowledge creation and knowledge creators to add value to Agriculture in terms of productivity, food and agro-processing is the challenge of the new landscape we inhabit. Finally there are the areas of huge potential, which will yield early returns in terms of impacting our growth of employment and reduction of unemployment. I can in passing, mention two in particular, housing, tourism. They must receive encouragement.

I have always believed that the ultimate national interest- in the attaining of India's true destiny.

And that destiny - I believe profoundly -is to be in the front rank of the greats of the globe.

Come, join me in this great and noble endeavour.