Financial Daily from THE HINDU group of publications
Thursday, Sep 19, 2002
Industry & Economy
`Task force report on chem sector will be implemented'
The Vice-President, Mr Bhairon Singh Shekhawat, being welcomed by the Union Minister for Chemicals and Fertilisers, Mr Sukhdev Singh Dhindsa, and the FICCI President, Mr R.S. Lodha, at India-Chem 2002 in the Capital on Wednesday.
NEW DELHI, Sept. 18
THE Government would try to implement every recommendation of the Task Force on Chemicals which had submitted its report to the Ministry of Chemicals and Fertilisers in March, the Union Chemicals and Fertilisers Minister, Mr Sukhdev Singh Dhindsa, said here today.
Addressing the inaugural session of India Chem 2002 in the Capital, Mr Dhindsa said that his Ministry was examining every aspect of the report.The task force had concluded, "given the right set of conditions and support, the chemicals industry can not only be rejuvenated, but in due course, also become globally competitive in certain sectors."
The task force had also made a case for setting up of industrial parks (integrated chemical parks), which could offer shared supporting infrastructure and other facilities such as common effluent treatment plants to the constituent units.
A majority of chemical manufacturing units are concentrated in Gujarat and Maharashtra. The task force had suggested that the existing units located in various clusters could be segregated as part of an industrial park.
Among other suggestions, the task force had recommended the imposition of a 0.5 per cent cess on the turnover of all chemical products sold in India (other than those manufactured by the small-scale sector).
It was suggested that the proceeds of the cess could be used to fund research and development for industry-initiated projects for scale enhancement and value addition selectively. Contribution to this cess should be tax-free, the task force had recommended.
Presenting a vision statement for the Indian chemical industry at the inaugural session of India Chem 2002, the Chairman of ICI India Ltd, Dr A.S. Ganguly, described the absence of integrated chemical industrial parks as one of the weakness of the domestic industry.
Dr Ganguly was the Chairman of the task force.In his address, Dr Ganguly described the "rise of the Chinese chemical industry" as a "threat" to the Indian industry.
"The Chinese are starting from square one. They are entering into partnerships with major German companies to set up integrated chemical parks in China. Such parks help in sharing of facilities. Further, the capital cost per unit of output would be the lowest in the world." Dr Ganguly told Business Line here.
He said initiating anti-dumping steps against Chinese chemical imports was a negative approach to growth.
"The positive approach to growth would be to improve one's own competitiveness in terms of cost and quality," he said.
Despite the decline in capital formation in the chemical industry over the last 10 years, he said that the near-term outlook for the industry was quite "positive".
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