$ 5 bn. Indo-Russian Bilateral Trade By 2005 : CII Report

The Confederation of Indian Industry (CII) has set a target of $ 5 billion for bi-lateral trade between India and Russia by 2005. To achieve this target, CII has identified some key sectors to enhance co-operation. The findings have been compiled in a strategic report “India-Russia, the Road Ahead”, which was presented to Mr. Llya Klebnov, Deputy Prime Minister of the Russian Federation by the CII President, Mr. Bharat Ram, to commemorate the visit of President Putin in October 2000.  

According to this well researched statistical compilation, the areas which could be synergised are - financial sector, information technology, bio-technology and pharmaceuticals among others.   The Government and Private Sector in both countries will have to look at building joint ventures in these sectors which not only target the huge domestic markets in these two countries but also capture the more lucrative markets in Europe, America and Asia, says the report.

India’s exports to Russia were only 2.53% of the total exports from the country and only 1.31% of the total Indian imports in 1999/00. Although the volume of trade was meagre, statistics say that the growth in exports in 1999/00 over 1998/99 has been a substantial 34%. The report points out that there is a tremendous scope for the two countries in mutual co-operation projects to expand trade.

The CII report reveals that Rupee debt is an important issue between India and Russia. India had agreed to settle the rupee debt of Rs. 36,000 crore by paying back Rs. 3,000 crore yearly. Indian Government has now been able to address to this issue by accepting the Russian proposal for the repayment in the form of goods, particularly food, medicine and computers.  

According to the study, India could support Russia in training its manpower in the IT. India’s strength is the skilled IT professionals and Russian strength lies in the hardware design and advanced computing. CII believes that synergising in IT sector could bring better prospects for the IT sector in both the countries.

In Bio-technology, both the countries have wealth of resources. The CII report on India and Russia cites that optimal commercialisation of these available resources to tap third country markets for these products could bring to better prospects for the sector.  According to the report, as far as the Pharma sector is concerned, although India exports  large number of pharmaceutical products to Russia, India lacks in research facilities. Indian companies could explore possibilities of working together in research and development. The well developed Indian financial sector could bridge this gap.

CII believes that the Indian and Russian capital goods too can find a lot of synergies. Indian companies could look into joint co-operation in this area in developing machines for power generation to tap the large domestic market available in India.

There exists a tremendous scope for increasing Indo-Russian co-operation in trade as well as in cross investments. CII report points that it is very important for the Governments and private sector companies in both the countries to capitalise on their strengths and synergise to reach hard currency markets. 

Need for impressive Corporate Governance in Financial Sector

The Associated Chambers of Commerce & Industry of India (ASSOCHAM)   has underlined the need for effective corporate governance in the financial sector by changing the quality and character of management of banks and financial institutions as the first line of defence since no system of regulation /supervision can be a substitute for good management.

The Chamber has said that the boards of banks, top management as well as the supervisory authority needs to strike a fine balance between risk models and judgement based on experience.   Mere reliance on heavier regulation and supervision is not a solution and in fact intensification of supervisory control can undermine market discipline and increasingly, there will be need to be more reliance on market forces and less on the supervisory authority. Enhanced transparency in disclosures, the Chamber notes, is reflective of good corporate governance and gives credibility to banks’ financial statements.  In any effective system of corporate governance in the financial sector, the board of directors would have to devise relevant strategies and be fully responsible for the working of the organisation. The board of directors should be subject to a considerable degree of accountability. Suppression of facts or mis-information should be made a criminal offence. The directors should be duly elected by the shareholders. 
ASSOCHAM has said that for good corporate governance in the financial sector, the depositor, as a stakeholder, should get precedence over the share-holder who has much less at stake in a bank.  The real challenge is not merely how quickly banks migrate out of the public sector but how banks are governed in an optimal manner. Further, the Chamber points out that the legislative frame-work should be made flexible to give the regulatory/supervisory authority sufficient powers to adequately deal with rapid financial innovations. Furthermore, as internal controls develop and banks undertake fuller disclosures, the supervisory functions should become more in the nature of a backstop and should concentrate on inspecting systems rather than individual transactions.

India and China sign agreement on bilateral co-operation in labour issues

India and China have signed an agreement on bilateral co-operation in employment services, vocational training and social security issues. The agreement was signed in Beijing on September 26, 2000 during the Labour Minister Dr. Satyanarayan Jatiya’s ongoing visit to China. Under the agreement the two countries will co-operate at the ministerial, expert and administrative levels on exchange of information and knowledge in five sectors. These include labour and social security related laws, industrial relations, policy and ways to generate employment, policy regarding vocational training and provision for social security. The two countries will also jointly organise training programme.  

A holistic approach with location specific system based technologies for food processing industries

Union Minister for Agriculture Shri Nitish Kumar inaugurating a National Conference on “National Policy on Food Processing” in New Delhi on 27.09.2000 said that the policy should create an impact at the grass root level to enable the producers of agricultural produce derive full advantage.   Panchayat level institution’s must be involved so that the development can have a uniform spread.   

Shri Nitish Kumar said that the department of food processing industries has been operating a number of plan schemes to develop the infrastructure for processing and post harvest management. Number of research institutions were also assisted to enable processed food to be of a high and acceptable standard. This sector is totally delicensed and deregulated to enable establishment of more and more such industries.

Small scale and unorganised sector accounts for more than 75 per cent of the food processing industry. There is an urgent need to harmonize the laws related to the industry.

Poverty alleviation slowed down in the nineties, says World Development report

Despite achieving higher economic growth of 6.1 per cent annual during 1997-98, the pace of poverty reduction in India slowed in the nineties says the World Development Report 2000-2001.   The report also pointed out emerging signs of rising inequality nationally.  According to the report, India suffered severe deprivations in education and health - especially in the northern region where caste, class and gender inequalities were particularly strong. The report highlighted the marked differences within, the country - with the south, particularly the State of Kerala, having sharply better educational and health.

Suggesting priorities for action in India, the report said accelerated poverty reduction would require faster growth, which in turn demanded liberalisation especially in agriculture and better provision of infrastructure lacking in most parts of India.