The decision to allow higher depreciation norms on certain vehicles also forms part of that pattern, since the commercial vehicle industry has been down in the dumps for quite some time. In addition, financial institutions have been asked to extend all possible support to the steel industry to enable it to tide over hard times.

There is no doubt that the sops announced will help the industries concerned to some extent. They will at least stall the deterioration in the financials of steel companies. At the very minimum, they will now post lower losses that they would otherwise have posted.

But the fact remains that there has been no great increase in steel imports to this country. Also, steel prices are not expected to rise dramatically even afterthe imposition of anti-dumping duties, because, in the final analysis, what is lacking is an increase in demand.

The trouble with trying to help industry in this piecemeal fashion is that the government may be deluded into believing that this is all they need to do in order to revive the economy. It needs to be kept in mind that while these measures may provide a temporary respite, they cannot reverse the trend.

Moreover, asking the financial institutions to bail out faltering industries bodes ill for these institutions, particularly as questions have been raised about the long-term viability of several of the new projects which are being funded. Asking financial institutions and banks to carry the can for the government may seem to be a practical strategy given the centre's lack of funds, but it could have severe implications for those institutions.

If they are asked to fund cost-overruns in steel projects, if they are asked to use their funds to warehouse shares disinvested by the government, payingmore than the market price for them, and if they are told to contribute towards shoring up the Unit-64 scheme, the cost of all this will be extracted sooner or later. Particularly if the quality of the assets of the financial institutions is none too good. Asking FIs to help the government will enhance financial fragility, and everyone knows the consequences of that.

For an industrial recovery, the government will have to lift business confidence, while ensuring that infrastructure projects take off. But while there has been no dearth of talk on the need for spending on infrastructure, the projects have not started.

A World Bank report had estimated that, if gross domestic product is to grow at 7 per cent to 2001, spending between 1996 and 2001 would have to be around Rs 50,000 crore. We are well short of that target. It is also well known that delays cost the nation dearly, and one of the reasons why we will have to pay through the nose for power is that we shall soon have no choice but to acceptwhatever terms are offered by foreign power producers. Yet there seems to be little sense of urgency on the part of the government.

Most infrastructure projects are today in the state list. That is why it is essential for the central government to form an inter-ministerial committee on infrastructure, where the state chief ministers too should be represented. This committee should follow up all projects to completion. That is not too difficult a proposition, because many projects have already had their finances tied up. Sanctions for several projects have already been obtained from financial institutions, and inspite of that disbursements have been held up because of policy glitches. These problems have to be thrashed out on a project by project basis, by inviting all affected parties to sit around the table with the committee.

Sounds simple, but this doesn't take politics into account. In view of the fact that several ministries are with the BJP's coalition partners, and also because of the fact thatmany states are ruled by rival political parties, co-ordinating the entire effort calls for leadership of a very high order. So far, the government at the centre has submitted little proof that it is capable of that kind of leadership.

And yet, there is no other alternative. The other approach is for the states to go it alone, which is what states such as Andhra Pradesh and Orissa are doing. Announcing grandiose plans, such as the 7000 km highway, is not required. All that is needed is to remove the roadblocks towards project implementation on a case-by-case basis. Once these projects take off, there will no longer be any need to provide sops on a selective basis to industries.