The Prime Minister, Dr. Manmohan Singh, has announced that a High Level Committee on Infrastructure, with himself as the Chairman, will be set up for monitoring the progress in all key infrastructure projects including airports, power, telecommunications, roads and ports. The Committee will monitor the progress in these sectors on a quarterly basis to ensure that targets are met. The Planning Commission will function as the executive arm of the Committee, identifying bottlenecks in policy implementation, guiding the relevant Ministries to speed up implementation of projects and generating ideas for the Committee’s consideration. The Deputy Chairman, Planning Commission has been asked to pay particular attention to this urgent priority of the Government.

The Prime Minister was inaugurating the JRD Tata birth centenary celebration organised by the ASSOCHAM, here today.

Dr. Manmohan Singh said that the tyranny of over-regulation must end. He said that the efficient functioning of municipalities, renewal of urban infrastructure and the ending of so called Inspector Raj are all issues that the State Governments must address. "Let me assure you that this Government is committed to taking this country forward on the path of modernisation and industrialisation, to make India a ‘super power of the knowledge economy’. This we can do by creating the requisite social, political and economic environment. This we should do by allowing individual enterprises to blossom, to create wealth, to master new technologies and conquer new markets", he added.

The Prime Minister said that the Government would ensure that there is a regulatory framework that is transparent; is independent of Government and, therefore, provides an impartial balance between public sector and private sector suppliers; and is based on international best practice. He has asked the Planning Commission to prepare a paper indicating what the regulatory structure should be for each infrastructure area. The paper would look at gaps in existing systems, comparing them with international best practices and would recommend changes in existing policy, if necessary, he said.

Dr. Manmohan Singh said that the business too owes an obligation to the society. No one appreciated this better than JRD who invested liberally in socially useful activities. He urged the industrialists to consider what their obligations were. It should be to discover the opportunities to invest in socially useful projects, in creating new opportunities for the under privileged, the less developed regions and the marginalised sections of our society. "Corporate social responsibility is not philanthropy. It is not charity. It is an investment in our collective future", he added.

Following is the full text of the Prime Minister’s address:

"I am exceedingly happy to be with you this morning. Let me begin by thanking the Associated Chambers of Commerce and Industry of India and Shri Hari Shankarji Singhania, Chairman of the JRD Tata Centenary Celebrations Committee, for inviting me to inaugurate the momentous centenary celebrations for the Late J.R.D. Tata.

As you know, this is my first opportunity to meet with representatives of our national business since the recent elections. I would have liked to interact more often with captains of industry and trade. But we are living through abnormal times. Never in the history of any government were the first 100 days characterised by the daily turmoil in Parliament. So I had to deal with many of these abnormal situations and that, naturally, cut me off from meeting people from various walks of life, whose views and opinions I greatly cherish and I seek to make a success of this experiment of building in our country a process which is inclusive which involves more and more people in the processes of decision making and gives them a sense of belonging. However, I am here to make up for the lost time and in many senses, I think it is only fitting that I do so at an occasion which allows me to pay my tribute to Late Shri Jehangir Ratanji Dadabhoy Tata--"JRD", as we fondly remember him—who was truly one of the titans of modern India.

For me personally, there is the added pleasure in the fact that the last time I had the privilege of holding public office, as Finance Minister, the then Congress government took the decision to confer the Bharat Ratna upon JRD Tata, making him the first captain of our industry selected for our highest civilian honour. There is little doubt that JRD was an eminently suitable choice, as the tallest and most daring titan amongst the galaxy of business pioneers in our country, who have contributed to our country enormously in the 20^th century, along with entrepreneurs like Ghanshyamdas Birla and Walchand Hirachand, and many other illustrious sons of India, JRD played a vital role in transforming an agrarian, colonized economy into a modern, industrial nation.

Most of us are familiar with the remarkable life story of this extraordinary man. The fact that he joined Tata Steel at the young age of 21 years, and his meteoric rise to become Group Chairman at the age of 34 are part of this fascinating and remarkable story. Barely twenty years later, the distinguished industrial economist, Dr. R. K. Hazari would write:

For those of us who remember the 1950s, this is a very impressive list. However, besides playing an important part in the growth of those companies, in the first two decades of his career, JRD also started India’s first commercial airline company and I understand Asia’s first cancer hospital. He also found both time and ability to help Avabai Wadia set up the Family Planning Association of India and to provide Dr. Homi Bhabha with the founding grant to establish the Tata Institute of Fundamental Research, thereby playing an important role in our quest for nuclear capability.

When the government conferred the Bharat Ratna on JRD in 1992, we were motivated by considerations that went beyond the very substantial contribution of JRD to Indian business and enterprise. Indeed, JRD was more than just a chairman of Tata Sons. He was a great visionary, a true patriot, with a deep belief and faith in India’s destiny. He was as I said a true patriot, who was cognizant of the wider societal role of enterprise. He provided leadership to a new kind of corporate citizenship in India. JRD’s emphasis on values, on ethics, on investing in education, research, science, technology, healthcare and in improving the quality of life of our people was a forerunner of the more recent concepts of ‘corporate social responsibility’.

As a student of economics in the 1950s and later as a practitioner in government, I was greatly impressed by the "Bombay Plan" of 1944. In the conceptualisation of this document, JRD played an exceedingly important role, along with Shri G D Birla, Shri Purushottamdas Thakurdas, Sir Ardeshir Dalal and Dr. John Mathai. When we read it today, nearly 60 years later, we see how relevant many of the central propositions of the Bombay Plan remain. In those days, it was an unprecedented document. It is worthy of emphasis that nowhere in the developing world has a group of businessmen come together to draw up such a long-term plan for a country. The Bombay Plan laid great emphasis on public investment in social and economic infrastructure, in both rural and urban areas, it emphasised the importance of agrarian reform and agricultural research, in setting up educational institutions and a modern financial system. Above all, it defined the framework for India’s transition from agrarian feudalism to industrial capitalism, but capitalism that is humane, that invests in the welfare and skills of the working people. In many ways, it encapsulated what all subsequent Plans have tried to achieve.

We have come a long way since the days of the Bombay Plan. Many of the "pre-requisites" of industrialisation and modernisation have been put in place. India has emerged as a modern economy, an important industrial economy and a knowledge power. We have impressive achievements to our credit – in the fields of space and atomic energy. However, in order to realise our full growth potential we need to pay much more attention to the expansion and modernisation of our social and economic infrastructure, to increase investment in education and health and to the creation of capability that make us globally competitive. Our Government is committed to building a competitive economy, just society to enable us to reclaim our rightful place in the comity of nations.

Our government fully understands that the processes of wealth creation are essential for us to meet our commitments to eradicating poverty, and to realise the latter, we are dedicated to supporting the former. One of the "basic principles for governance" explicitly stated in the very beginning of our Common Minimum Programme is a commitment to ‘ensure that the economy grows by at least 7 per cent – 8 per cent per annum in a sustained manner over a decade and more, and in a manner that generates employment, so that each family is assured of a safe and viable livelihood.’ This requires therefore, an acceleration in the rate of growth of agricultural production to up to 4 per cent per annum. It requires industrial production growth rates of around 10 per cent to 12 per cent. It is easy to see that the two are inter-linked. I realize that for this to be feasible, it is of utmost importance that we create an enabling environment that rewards creativity, risk-taking and the spirit of enterprise and adventure.

Our government appreciates the challenges that we face in realizing these goals. We know that to deliver on our commitments, to generate the employment growth required to keep pace with the growth of our labour force, to reduce poverty and to find resources for new investment in agriculture, infrastructure, education and health, we must increase the rate of capital formation in the economy. You would recall that responding to reform initiatives of the early 1990s—symbolising the air of optimism and confidence of that time--the ratio of gross domestic capital formation to gross domestic product hit a peak of nearly 27 per cent in 1995-96 and private corporate sector capital formation was over 9 per cent of GDP. However, these ratios declined to around 23 per cent and 6 per cent respectively in recent years. This decline has been a distressing feature of economic growth in recent years.

We must and we shall reverse this trend. I commit our government to re-energise the economy’s growth engine and to recreate policy and political environment required to boost investor confidence and enable an increase in private investment in the economy. In doing so, our government will draw inspiration from the efforts of pioneering spirits such as JRD and other entrepreneurs of his time, who achieved a remarkable amount despite the hostile conditions prevalent during the years of colonial rule.

To enable new investment, to generate higher growth in incomes and employment, we must unleash the full potential of individual initiative and enterprise. We must provide a new stimulus to the spirit of our businessmen. We must create a social, politician and economic environment in which our budding entrepreneurs can realise their dreams. When enterprising and creative individuals create wealth, they create new employment opportunities and new hope for our collective future.

India has changed much since Independence, and in our own times, we have leaders of a new generation in established business families who are striking out anew. Indeed, we have seen Ratan Tata giving shape to the production of an Indian car, which can find markets abroad, which is a signal development that needs greater recognition. Business groups like Reliance, Ranbaxy and the Tatas themselves have been seeking global markets. We have an IT revolution of which Shri Fakir Chand Kohli, Shri Narayanamurthy and Shri Azim Premji have been pioneers. In pharmaceuticals, the work and creativity displayed by the Ranbaxy Group, Dr Reddy’s Lab, Cipla and the Piramals is exemplary and worthy of emulation. There is much for us to celebrate about Indian enterprise in this centenary year of JRD.

I have repeatedly stated our Government’s commitment to fiscal discipline and to improving the public finance. I have also written to my colleagues in the Union council of ministers drawing their attention to improving the functioning of public sector enterprises. Our objective of increasing public investment in social and economic infrastructure cannot be met unless the Central and State governments pay attention to the improved management of public finances and public enterprises.

I have always believed that India has to be a major trading nation of the world. For that we need to be a competitive economy that works on the frontiers of scientific, technological and managerial knowledge. The trend of globalisation is an irreversible one. We cannot shy away from it. We must therefore prepare ourselves for greater integration with the evolving world economy that has markets integrated across the world. Firms must become more competitive globally. To do so firms need to be competitive domestically first. They must have world class capabilities based on the use of modern science and technology. They need to invest in research and development, managerial skills and global opportunities of strength. Our Government will facilitate all this so that India becomes the home of multi-national corporations of the future.

To enable this we must create world-class infrastructure. Over a decade after we first launched economic reforms, we still cannot say we are proud of our roads, our airports, our seaports, our power supply, our railways, our urban infrastructure. There has been inadequate attention paid to the transformation of the basic infrastructure of modern industrial development. This we are committed to reversing. In search of these areas we require innovative mechanisms of public-private partnership. The public sector alone cannot deliver what is required in timely and competitive manner. Hence, the importance of such a partnership.

Our Government will ensure that there is a regulatory framework wherever it is needed – that is transparent and is independent of government and, therefore, provides an impartial balance between public sector and private sector suppliers and is also based on international best practice.

I have asked the Planning Commission to prepare a paper indicating what that regulatory structure should be for each area, like power, roads, ports, and so on. The paper will look at gaps in our existing systems, comparing them with the international best practice, and will recommend changes in existing policy, if necessary.

The government will closely monitor progress in all key infrastructure projects, including airports, power, telecommunication, roads and ports on a quarterly basis to ensure that targets are met. To this end, I am setting up a High Level Committee on Infrastructure that I will chair myself. The Planning Commission will function as the executive arm of this Committee, identifying bottlenecks in policy implementation, guiding the relevant Ministries to speed up implementation of projects and generating ideas for the Committee’s consideration. I have requested the Deputy Chairman of the Planning Commission to pay particular attention to this urgent priority of our Government.

The acceleration of private investment is a function of infrastructure as well as incentives. The incentive structure is in fact more or less in place. The tax reform already undertaken as well as the proposals in the pipeline like value-added taxation (VAT) have addressed the fiscal policy agenda that industry has been signalling for some time. I am aware of the need to further simplify the procedures for tax compliance and the finance ministry will address these and related issues in the next Union budget.

The industrial and tariff policy reforms we initiated over a decade ago have addressed to some extent the demands of industry. However, the time has come for us to move ahead on the unfinished part of the agenda. Much of this, however, is in the realm of State governments. Further reform of industrial and tax policies, the efficient functioning of municipalities and renewal of urban infrastructure and the ending of the so-called Inspector Raj are all issues that State governments must address.

I am told, in China an industrial establishment is visited by just six inspectors: one each for monitoring of adherence to laws pertaining to taxation, environment, labour, workers’ health and working conditions, municipal laws and product quality. I believe in India many of you find your industrial establishments visited by over 30 inspectors.

Therefore, the tyranny of over-regulation must end. I will be reconstituting the Prime Minister’s Council of Trade and Industry. One of the areas of focus of this Council will be the reduction of the Inspector Raj. Through this forum, I will be seeking your ideas and suggestions to carry this idea far.

I do not have to re-assure this audience about my commitment to economic reform and growth. However, I do so because I am fully aware of the apprehensions and anxieties that some of you entertain. Let me assure you that our Government is committed to taking this country forward on the path of modernisation and rapid industrialization, to making India a ‘Super Power of The Knowledge Economy’. This we must do by walking hand-in-hand with our industry and commerce. This we can do by creating the requisite social, political and economic environment. This we should do by allowing individual enterprise to blossom, to create wealth, to master new technologies and conquer new markets, while at the same time, to create a society which is just, fair and equitable, a polity which is inclusive and an economy that is stable.

Business too owes an obligation to society. No one appreciated this better than JRD who invested liberally in socially useful activities. I urge you to consider what your obligations are today in discovering opportunities to invest in socially useful projects, in creating new avenues for the under-privileged, in investing in the less developed regions of the marginalised sections of our society. Corporate social responsibility is not philanthropy. It is not charity. It is an investment in our collective future.

In this year of JRD’s birth centenary, I commit our Government to the ideals and objectives of building a modern, globally competitive and humane economy that JRD and his generation of industrial pioneers so cherished. I want you, Ladies and Gentleman, to be re-assured that our government is committed to the growth and development of Indian business and enterprise. Equally, I seek your commitment to the building of a more humane, caring and just society. In this we are partners. We must walk together on this road to prosperity and well being of our citizens."