Mr Sushil Ansal, chairman of the Ansal group, who recently took over as PHDCCI president, spoke to Veeshal Bakshi and Rajeev Jayaswal, about his plans set up new offices in all the 11 states where the association has members.

Excerpts:
The PHD Chamber of Commerce is considered to be a regional body. Do you intend to change this perception and evolve it into a national-level association?
The interest of PHDCCI is regional and we will continue to focus on that. In fact, I want to sharpen that focus. We represent the business interests of industrial units and businesses in Delhi, Punjab, Himachal Pradesh, Haryana, Rajasthan, Uttar Pradesh, Jammu & Kashmir, Madhya Pradesh and the Union territory of Chandigarh. Very soon, two new members, Uttaranchal and Chattisgarh, will be included in our members' list, taking the total number of states we serve to 11.

On national issues, we closely work with industry bodies like Ficci, Confederation of Indian Industry (CII) and Assocham. Our focus is to highlight issues that concern the member states. This, however, does not dilute the importance of national issues for us. We take up micro issues that concern our 32,000 members, who we have through various affiliated industry bodies, and 1,400-odd direct members.

Domestic industry is facing a major threat from import of Chinese goods in the market, both directly as well as through Nepal. What is PHDCCI's stand on this?
The government must take steps to stop Chinese goods from flooding the Indian market. It should review the special status accorded to Nepal in view of Chinese goods invading the Indian market. The favourable treatment meted out to Nepal is being misused. This is against the interest of domestic industry. Besides, what is more important, is the imposition anti-dumping duty on such products. In certain cases, our customs duty is less than the duty suggested under World Trade Organisation (WTO) agreement. The government should at least raise the import duty on such items to permitted levels under the WTO agreement to save domestic industry from extinction.

Here, I would like to clarify that we are not against liberalisation or globalisation, we want a level playing field. Excise duty and other levies on domestic industry should also be brought down to a level where they can compete with their global counterparts.

What is PHDCCI's prescription for the economic development of northern states?
The economic potential of north India has been grossly under-utilised. We want north India to become a unified economic zone in which states have uniform policies and tax structures while retaining their distinct independent status. This would give a major boost to the economy of the region as a whole and result in the emergence of an economic union in north India that provides common infrastructure facilities to member states. For example, Himachal Pradesh is power surplus whereas Punjab and Haryana are power deficit states. Why can't there be a system in which Himachal Pradesh provides surplus power to other member states in the region and is adequately compensated? The member states can pool in resources to increase the power generation capacity of the hill state. Similarly, co-ordiation among member states with regard to state highways can help in developing an excellent transportation system in the region.

Northern states are poor cousins of their southern counterparts if one looks at overall economic growth in the past few years. What do you intend to do to change this image?
It is true that the southern states have been able to achieve greater economic development. We are planning to pool our resources to develop common infrastructure in various areas to achieve higher growth. For better co-ordination among the member states, we hold summits every year-half-yearly conferences of chief secretaries of member states and an annual chief ministers' conference. This apart, in order to understand our strengths and weaknesses, we are planning to institute a study by a professional firm, which will also recommend various measures to strenghthen the region's economy. The entire exercise is likely to be completed in the next six months.

The Haryana government recently announced a move to impose a 4 per cent local area development tax. What impact will this have on investment?
It will definitely affect the industry adversely. Foreign investors are really upset over this. A Japanese company told the Haryana chief minister during his visit to Japan that they may not invest more money in the state if such policies are pursued. The chief minister has promised to address this issue.

A large number of industrial units, specially textile mills in north India, are sick. What are the reasons for sickness and what are your suggestions to revive these units?
There is an urgent need to review the existing labour policy. Unless the government allows the sick units to sell, a large value will remain unlocked. As a result, both the labours as well as enterpreneurs will face a difficult time. We do not mean that there should not be any security for labour. Their interests must be protected. But at the same time, there is need to have a rational approach. Even in a communist country like China, labour laws are quite industry-friendly. They have two sets of labour laws, one for old companies and the other for new companies. To attract investments, they have made labour laws flexible for new companies. But rigid labour laws in India dissuade enterpreneurs from investing in the country. Even in old companies, the government should allow a certain number of labour to be replaced so that the new set of workers can handle new technology efficiently. The problems of the textile industry are also due to labour problems. Unless the government allows sick mills to sell offtheir assets, revival is not possible. Similarly, being a seasonal industry, textiles need flexible labour laws. This is the reason why the industry is not showing any signs of revival despite the government having constituted the technology upgradation fund scheme to revive sick mills.

What is PHDCCI 's view on foreign direct investment (FDI) in the housing sector?
According to estimates, about Rs 4.5 lakh crore is required to meet the housing and the urban infrastructure needs of the country. It is not only difficult but also impossible to meet such a requirement internally. Hence, allowing FDI in housing is the need of the hour. However, in the context of the recent South Asian crisis, we suggest that to begin with only 50 per cent FDI should be allowed in the sector with a lock-in period. Apart from this, the government must introduce certain structural reforms related to the housing sector, which includes the notification of the Rent Control Act and the immediate implementation of the Urban Land Ceiling Act in all the states.