In conversation with J Prasad David, secretary, Southern India Chamber of Commerce and Industry (SICCI)

What is the industrial growth scenario of Tamil Nadu, Andhra Pradesh and Karnataka?
The industrial growth scenario in the southern states of Tamil Nadu, Karnataka and Andhra Pradesh is positive. With economic growth surpassing 6.4% per annum and with foreign exchange reserves exceeding US$ 170 mln, there is all round optimism for the year 2001. All the three states have established a single window system and industrial clearances have been quickened. Industrial peace and skilled manpower apart from English have facilitated quicker communications with the outer world and have helped to bring about inflow of investments. All the three state governments are pro - active and maintain close links with business organisations such has chambers of commerce.

What special thrust is needed to augment industrial growth?
To augment industrial growth, the strengthening of infrastructure is a prerequisite. Power, which is a basic necessity, will have to be augmented while keeping in view the cost of power which has to be competitive. The setting up of a construction corporation by the ministry of railways in partnership with the southern states is a step in the right direction. As far as roadways are concerned, the three NH (national highway) projects in AP, Karnataka and Tamil Nadu will facilitate road movement. There is a need to develop ports as well as an airport. The declaration of Chennai airport as a gateway port is still pending clearance.

What are the impediments which prevent south-based companies from growing?
The southern states will have to be pro-active and should have partnerships with business organisations. All the states will have to establish their own trade fairs for which efforts will have to be made to set up suitable infrastructure. The existing hotels will also have to be further strengthened to make them more attractive for tourists. More foreign airlines should be given landing facilities to promote tourism.

What points should the government consider while promoting companies and augmenting industrial growth?
All states will have to strengthen social infrastructure such as housing, water supply, sanitation and education as well as recreational facilities. Since IT has played an excellent role, there should be more IT parks in important sectors in the south. Industrial towns with potential such as Coimbatore, Madurai, Mysore, Vishakapatnam, and Mangalore, etc. will have to be further developed for industrial and IT- related activities.

What are your views on different sales tax laws for each state and rates of taxation which affects the profitability of south-based companies?
As far as sales tax is concerned, there has to be uniformity in the southern states and also with other leading industrial states in India. Lowering sales tax to attract industries often leads to a loss of revenue and should be avoided. In the case of large assesses, the system of value added tax should be introduced and all states should ensure that the various PSUs are privatised which will, in the long run, fetch more resources. Since India’s doors are open to foreign competition, each state government should also set up watchdog panels to ensure that there is no undue dumping of goods by foreign countries. At the same time, existing industries will have to be strengthened through constant interaction with various business organisations.