Globalisation has had its impact on Punjab; information technology (IT) is the new mantra for this fund-starved militancy-prone border state. Business opportunities abound as rich Punjabis clamour for the best of goods and services. Nonetheless, investors are wary, Punjab's manifold pluses notwithstanding-a disciplined, hardy, skilled labour force, peace and lucre aplenty. In an interview with Baljit Singh, Mr Tandon outlines the steps being taken to make Punjab an attractive investor destination.

How far has Punjab moved on an exit policy?
Punjab has moved the fastest in this sector. We were the first to clear three shifts for women workers in the IT industry, classify IT as an essential service to pre-empt industrial unrest and extend overtime limits to 75 hours in three months. We have also taken important steps to end inspector raj by ensuring that all inspectors visit an industrial unit only once a year together. In case of any dispute, there will be only one challan in a single court. We have conceded most of the various industry associations' demands.

But has any industrial unit been allowed to close?
Yes, there have been two cases. One of them in Dera Bassi last month. If a group or industry applies to close a loss-making operation, it is allowed to do so after paying full compensation to its workers. At the moment the clearance is on a case-by-case basis, but we expect to have an exit policy in place in the next three to four months.

Besides being the labour minister, you are also a businessman. What is your view on a hire and fire policy?
We must be pragmatic and realise that industry is in a crisis. Antiquated labour laws have ended up becoming anti-worker as businessmen prefer to spend on expensive labour-saving equipment rather than employ an additional worker. This negates our advantage of a cheap labour force. Given this fact, a hire and fire policy with full compensation is in the interest of workers and industry alike, as it removes the fear factor in creating jobs.

Will the trade unions accept the new policy?
Trade union leaders frequently put their own interest above that of workers and even the nation. The fact is that liberal laws are in everybody's interest.

What is Punjab's record in labour relations?
It is the best in the country. The labour force here is very disciplined. Even when there are disputes, over 50 per cent of cases are decided at the conciliation stage against just 15 per cent nationally. The new amendments will help increase the rate of conciliation.

What other steps have you taken to improve the industrial climate?
We have made important changes in the Shops (Commercial Establishments) Act. We have withdrawn Sections 9 and 10 thus ending restrictions on working hours. Proprietors are no longer under compulsion to close shop on Sundays. Where labour cases have piled up, we have used Lok Adalats for quick redressal of grievances. One Lok Adalat at Ludhiana cleared 70 cases in just one sitting. We intend to extend the process to the entire state. We are also in the process of clearing a new rent Act that will be fair to both tenants and landlords.

Under it tenants and landlords will have to sign written contracts that will be registered and will be binding on both parties. Should the tenant default on two months rent twice, he would be automatically required to vacate. We have also made specific amendments to allow returning NRI's to reclaim their properties.

What quantum of investment do you expect via the NRI route?
Around Rs 100 crore should come in over the next year or so once word about the new rules gets around.

What specific incentives would you give to an investor?
If an investor is serious we would open all doors. A sub-committee is already in place under the chief minister to facilitate investors. Apart from subsidised land, we would give immediate power connections and provide loan facilities from PSIDC/PFC of up to Rs 3 crore. In case more is needed, we would approach other credit agencies.

Would you divest loss-making PSUs to improve the state's industrial health?
At the moment discussions are on. However, one thing is clear-the state cannot carry the burden of loss-making units forever. Look at the sugar industry. All the cooperative mills are sick and we have had to buy sugar from Pakistan. It is a shameful state of affairs. Last year Rs 46 crore was diverted from the Rural Development Fund (RDF), to pay the dues of cooperative mills to farmers. Not only is this a serious misuse of the RDF, it is also a waste of public money.

Do you believe the industrial climate has improved since your government assumed power?
Yes, it has improved. The Hero group and the Oswals have put up new units and SIEL is setting up a unit at Rajpura. The IT park is taking off. At the same time it cannot be denied that many traditional industries like Amritsar's shoddy yarn and viscose industry are in trouble. But this is a part of the industrial process everywhere and we cannot escape it.