Business Daily from THE HINDU group of publications
Monday, Jun 19, 2006
Industry & Economy
Columns - Random Walk
New Govt makes its policy clear
Even as the new Left Democratic Front (LDF) Government in the State is yet to settle down to its true business of tackling the State's developmental dilemmas, last week Mr R.L. Bhatia, the Governor, outlined the government's policy in his first address to the 12th Legislative Assembly.
As expected, the policy stressed measures for reviving the traditional industries and strengthening the public sector, the twin areas of top concern for the LDF.
RELIEF FOR FARMERS
Also true to its election manifesto, the LDF Government has emphasised solutions to the plight of the debt-stricken farmers of Kerala, discussed in this column last week. In his policy address, the Governor said the new government was contemplating the setting up of a Debt Relief Commission with quasi-judicial powers to help farmers who have debts with private moneylenders charging exorbitant interest rates. On the subject of traditional industries, the policy chose to focus on the coir sector. According to the policy declaration, the coir industry would be reorganised by reviving the cooperatives, removing the middlemen, modernising and diversifying production, ensuring adequate supply of husk and fibre and strengthening marketing.
As for the future thrust areas, the new policy identified information technology (IT), biotechnology and tourism as the new growth sectors. The government has promised to come out with a new IT policy soon that will augment both public and private investment in the sector. The State's inherent strength of quality manpower and connectivity infrastructure would be fully leveraged to create 200,000 direct jobs in the IT, IT-enabled services (ITES) and business process outsourcing (BPO) sectors in the next five years.
Also, in an interesting twist to conventional wisdom, the new policy promises to concentrate on the establishment of capabilities in the production and hardware sectors rather than depend on the ITES sector alone. Also laudable is the intention to set up a certification mechanism for the various courses imparted through IT training centres in the State. This will go some way to ensure quality manpower for the State's IT industry.
However, some of the policy's IT prescriptions appear to be fuelled more by political expedience than pragmatic sagacity. These include the recognition of the "strategic importance" of promoting Free and Open Source Software (FOSS) and the aim to make Kerala the FOSS industry destination of the country.
Also, the revamping of the Akshaya e-literacy project and providing boost to the e-governance initiatives of the government through the commissioning of the State Wide Area Network by March 2007 would seem to be more of a cosmetic touch-up.
In any case, to achieve these goals, the government will have to create an investor-friendly environment as well as develop infrastructure. The new policy recognises the need to provide world-class infrastructure as an essential condition for rapid industrialisation of the State.
Towards that end, the government will immediately float a public limited company on the model of the Cochin International Airport Ltd (CIAL), which fairly successfully tapped the vast potential of the non-resident Keralites across the world to raise the balance share capital.
Apart from infrastructure, the other key hurdle in the government's path is finance. As the Governor pointed out in his policy address, the government is in deep financial crisis, with debts reaching the level of Rs 43,637 crore and the ratio of debt to State Domestic Product touching 41 per cent.
With a huge uncovered committed non-Plan expenditure and curtailed borrowing limits slapped on it by the Centre recently, the State needed to find ways to mobilise additional resources.
Thus the new government has its work agenda clearly drawn out. All it needs to do is to deliver. That is easier said than done.
The writer can be contacted at email@example.com
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