NEW DELHI, FEB 28: The Economic Survey (1999-2000) today asked the government to intensify reforms, especially in financial and labour sectors, to give a fillip to industry which was experiencing a turnaround in the current fiscal after a two-year downtrend.The Survey expressed concern over infrastructure shortfalls and said "constraints in roads, power and telecom need to be removed by creating higher capacities for sustained industrial growth."Attributing the improved industrial performance mainly to the growth in manufacturing sector, it said "further, various policy measures of the Union Budget (1999-2000), including those aimed at specific sectors like housing, information technology and infrastructure, have bolstered the revival."A low inflation and an increased demand led to improved capacity utilisation and the trend was supported by a pick up in exports and good agriculture performance, which created a strong rural demand, to help industry record impressive performance during the year.The Survey also called for legislative reforms to facilitate rapid redeployment of investment from unproductive to productive lines of activity in view of the rapidly changing domestic and international economic environment.Stating there were clear "feel good" factors in the economy, the Survey said industrial production was likely to be reinforced by better performance by the infrastructure industries."Industrial recovery is also helped by the improved perceptions of international credit rating agencies and investors, rise in Business Confidence Index, better corporate performance and bullish sentiments in stock markets," it said.The broad-based nature of the recovery was evident fromgood performance of basic, intermediate and consumer goods, the Survey said adding there was still scope for continued recovery.On the public sector, the Survey said the government intented to encourage marginally profit-making enterprises to promote Voluntary Retirement Scheme (VRS) by raising money from banks against government guarantees and interest subsidy.PSEs would also be encouraged to issue bonds to workers opting for VRS with the government guaranteeing the repayment of such bonds and fully reimbursing interest payments, the Survey added. The Survey admitted that the year was bad on Foreign Direct Investment front with the total approvals falling to Rs 23,795 crore during January-October 1999 from Rs 24,454 crore during the same period.
