Addressing delegates at the ‘2008 NLSIU International Law and Economics Colloquium’ on the theme ‘The Elephant and the Dragon: Lessons and Challenges Respecting Role of Law in Economic Development in India and China,’ he said China has an advantage over India when it comes to labour laws. China’s labour laws were flexible as opposed to the inflexible, archaic Indian laws, he added.

“The elephant was indeed behind the dragon. We need to concentrate on achieving a double digit growth figure in the manufacturing industry/sector. Our infrastructure is inferior to that of Chinese and our productivity of land is only half that of China due to bad utilisation and non availability of water. We need to make our laws flexible to attract investment and address regulatory issues”, he said.

He said the growth of developing economies have been gradually coming down, while others including Taiwan, Korea and Indonesia have a sustained growth. India, he said, was witnessing gradual transformation, particularly on the infrastructure front, where a shift from the government-dominated public sector to private participation was yielding results.

Yet other crucial issues such as delay in the judicial process was being seen as major weaknesses.

Judicial delay

“The strength of the judiciary has been the trust and fair judgement reposed in it by people. But in today’s globalised environment, speed is of essence. A major reason for the delay stems from the problem of the government going in for a appeal for every decision made against it. The government ends up as a litigant in almost every case against it. We need to bring down the percentage of appeals from the present 90 percent to 15, there by speeding up the decision making process” said Dr Ahluwalia.

Dr Ahluwalia called  for imposition of a cess on amount of water drawn from electric pumps to curb over utilisation of water and the resource generated for ground water recharge. “We could reach a situation in future where we will be a water stressed country. Our productivity of land is half that of China. With the growth of population ever rising and absence of a clear definition of property rights, the per capita availability of water will decline. Proper legal measures are needed for over utilisation as water is not priced properly, ” he observed.

He also suggested that attracting talent from the private sector to the civil services would not yield desired results and advised that governments must be prepared to pay more.

Speaking to reporters later, Dr Singh said with international crude oil prices continuing to determine the inflation rate in the country, the problem was getting real.  “Will oil prices shoot up in the medium term? Domestic users will have to pay if international prices go up,” he cautioned.