The Ratan Tata-chaired Investment Commission has asked the government to wind up the entity instead of extending its term further. Though not explicitly stated in a letter sent recently, there is a sense of resignation within the commission on the lack of adequate follow-up by the government on its recommendations.
The commission, set up in December 2004, had three members: Ratan Tata, HDFC?s Deepak Parekh and former chairman of Hindustan Lever Ltd Ashok Ganguly. Ganguly resigned after being nominated to the Rajya Sabha in November 2009. Originally, the commission had a three-year term, but after a two-year extension its term officially ended on December 31, 2009.
The Investment Commission submitted its first major report to the government in February 2006. Several of its recommendations in the 100-page report could not be implemented in the first five years of the UPA government because of opposition from the Left, a key ally, and now because of lack of political consensus within the Congress and its new allies.
The commission called for significant reforms across manufacturing, services, infrastructure and resource-based and knowledge-based sectors. These include flexibility in labour laws (specifically allowing contract labour across sectors and doing away with the need to obtain state government approval before retrenching staff), a single-point contact to facilitate high-value projects, opening up banking (74% foreign ownership in private banks, 49% FII investment in public sector banks, allowing Indian corporates up to 15% ownership in banks, etc), 51% FDI in retail sector and privatisation of the Chennai and Kolkata airports.
When contacted, Ganguly said: ?The government followed up on many of our recommendations. However, it can always be said there is room for more action.? He said the commission had more or less fulfilled the mandate given to it by the government five years ago.
