Mr. Kapoor s Vote of Thanks & Concluding Speech ASSOCHAM India Manifesto 2014: The Vision of a New Vibrant India ASSOCHAM 92 nd Annual Session, July 19, 2013 New Delhi Chief Guest Dr. Manmohan Singh, Hon ble Prime Minister of India Dr. Manmohan Singh, Hon ble Prime Minister of India Dignitaries from the Government Shri R N Dhoot, President, ASSOCHAM Members of the Media Distinguished Guests, Ladies and Gentlemen It is my privilege to be part of this august gathering of leaders at India Manifesto 2014: The Vision of a New Vibrant India. On behalf of ASSOCHAM, I would like to whole heartedly express my deepest appreciation and profound gratitude towards Hon ble Prime Minister, Shri Manmohan Singh, for gracing the occasion as the Chief Guest and sharing with us his vision of a Vibrant India. We are deeply honored to have you here. Sir, on this momentous occasion, it is indeed our privilege to have you at ASSOCHAM for your first interaction with an industry chamber since the Cabinet meeting on July 16 on landmark FDI reforms in several key sectors. This defining step is a testament to your commitment to the nation s reform agenda. This will surely go a long way in boosting investor confidence in the economy, while also addressing the falling rupee and current account deficit. Sir, your last address to ASSOCHAM at our AGM in June 2008 was highly encouraging and has been a guiding light for us in our endeavor to create a vibrant dialogue between industry, government and all other relevant stakeholders and fostering a supportive policy environment, towards ensuring stability and sustainability of the growth process. Sir, you have been relentlessly working for the cause of the Indian economy & India Inc for last many decades. Your persistent efforts and steely determination as the Prime Minister of India, has helped unleash some bold economic reforms over the last few years. Sir, as you are aware, ASSOCHAM community consists of more than 4 lakh members, 300 chambers and five promoter chambers. ASSOCHAM community has signed a charter to realize its vision of achieving Economic Security of India. Economic security with its underlying four components viz., Livelihood Security, Energy Security, Ecological Security and National Security constitute five important challenges. The ultimate outcome of Page 1 of 5
fulfilling this Vision is not only to realize the growth potential of the country but also ensuring that this growth is inclusive and sustainable. What is needed now is a concerted collaborative approach by the Government in partnership with private entrepreneurs to drive economic transformation in India. As the apex Knowledge Chamber of the country, ASSOCHAM has always been proactively involved in advocating issues of national importance. There are some immediate concerns that Industry is facing, that as an Apex business Chamber, representing all Industries, we request you to address - 1. Stable Investment Environment De-risking investments and providing a stable & transparent policy framework is essential for attracting foreign investors, for which India competes with other emerging / developed economies as well. FDI inflows, crucial for financing CAD in the short term, have registered almost 38 % decline in FY13. While, Indian economy is capable of absorbing ~US$ 50 billion in FDI, the recent examples of uncertainty in the multi-brand FDI guidelines and divergence of State & Centre policies has made international retailers wary of Investing in India. We must ensure that a. Investment related policies are not implemented in Silos b. While the recent announcement to liberalize FDI regime in key sectors, such as Telecom and Insurance, and removing ambiguities in FDI & FII definition are welcome steps, we must provide simple and clear rules to foreign investors and ensure their concerns are addressed promptly 2. Kick starting an Investment-led Economic Revival Several measures in short to long term are essential to reviving investments to stimulate growth. Some of these measures that need further impetus are: a. Utilising PSU cash surplus: The Government has initiated discussion on effectively utilizing the excess Central PSU funds, which are estimated at ~INR 2.8 Lakh Cr., for capex. There is a need to work out a plan that identifies investment avenues long with the end use. b. Investing in urban infrastructure: It is estimated that an investment of INR 39 Lakh Cr. may be required in urban infra over the next 20 years. With urban areas as the centre of economic development, facilitating urbanization is critical to sustaining India s economic growth momentum c. Focusing on the North East as the future growth engine: North East, as India s Gateway to the East, has abundant natural resources & pool of educated human capital. We should replicate Project Himayat for skills development & employment in this region Page 2 of 5
3. Speedy Implementation of Goods & Services Tax & Direct Taxes Code: GST is expected to improve tax collections and boost India's economic development by breaking tax barriers between States and integrating India through a uniform tax rate. In the Medium term, GST is expected to increase India s GDP within a range of 0.9-1.7%, as also substantial Export & Import gains Further, DTC implementation will facilitate voluntary compliance and help increase the tax-gdp ratio (currently at 5.57% in FY13 for direct taxes) With considerable gains for Industry & Economy, We request Government to expedite the GST & DTC rollout with resolution of contentious issues between Centre & State Govt. 4. Power Sector & Resource Self- Sufficiency To set Indian economic juggernaut rolling, we urgently need to re-energize our power sector. Government has set itself a target of 88 GW of power capacity addition in the 12 th plan while only 54 GW was added under the 11 th plan. a. Fuel supply risks, precarious financial health of electricity distribution companies, stalled projects owing to clearances, etc continue to shadow the power sector b. While CCI (Cabinet committee on investments) has cleared many projects related to Oil& Gas exploration ($13.4 Bn) / Power, it must further rationalize regulatory procedures & ensure transparency in policy transmission (ex Pricing etc) for sustained investment in sector c. Further, to ensure sustained fuel supply in the long run, Public / Private sector Cos must be encouraged to acquire energy assets abroad. 5. Sir, as an Immediate Concern, Industry also requests govt. to have a comprehensive and robust strategy for finalizing bilateral trade agreements with other countries, with further review of existing agreements as well. We need to ensure a level playing field for our Industry, specifically MSMEs, given their contribution to GDP & employment generation Sir, While there are immediate concerns, we request Government to focus on some medium to long terms measures as well for sustained growth momentum - 6. Improving Export Competitiveness & Sustained Financing of CAD - India had a ~ $90 billion gap in terms of current account in FY13, while our exports continue to Page 3 of 5
decline. With global business cycles becoming prolonged, it is imperative to improve our export competitveness for sustainability of CAD. Towards the same, we must ensure Shifting India s exports basket from low-end /raw materials to high technology / value added products, where the demand is not affected due to price sensitivity. Manufacturing Sector will play a pivotal role towards the same 7. Strong & Vibrant Manufacturing Sector Sir, as advised by you in your July 9 th address, Manufacturing sector is not only critical for increasing export competitiveness but also essential for India to grow at > 9% rate and providing better livelihood opportunities through its immense job creation potential. Manufacturing sector only grew at ~2.6 % in last quarter of FY13, indicating enormous lag in the sector. a. Though ~ 17 months have passed since clearing of National Manufacturing policy, contentious issues relating to labour and environment remain as evident roadblocks. State governments need to ensure speedy implementation of projects through effective single window clearances, overseen by a high level committee b. Skill Development Skill development must remain top priority for improving our manufacturing expertise. While NSDC has the mammoth task of transforming the skill training landscape in India, they must step-up their focus on high end manufacturing SSCs (Sector Skill Councils) with funding tie-ups from multi-lateral agencies like ADB, World Bank etc. We need to create a skill ecosystem around our Industrial clusters like NIMZ etc 8. Reforms in Agriculture Sector for Poverty alleviation & Inclusive growth: a. While India has achieved growth in Food grain production over the last few years ( ~254 MT in 2013), increase in storage capacity has not kept pace with the same, particularly with the passage of the Food Security Bill. b. The Inadequate infrastructure for storage, including Cold storage, has lead to enormous wastage in Food grain / F&V. We urgent need to encourage private sector investment in agri supply chain ecosystem. The industry is of the opinion that its majority of problems can be addressed just through more effective administration and better co-ordination among various ministries. Therefore, review and rationalization of administrative procedures with an objective of optimization and transparency will go a long way in ensuring our economic security. As we go about transforming the lives of the people across India, I truly believe that your idea of a Modern inclusive India will serve as a beacon for other emerging nations around the world. Page 4 of 5
We at ASSOCHAM are confident that your suggestions, views and words of encouragement will continue to be our inspiration in the coming years as well, as we further the cause of a Vibrant India. As I step into the shoes of outgoing ASSOCHAM President, Shri Raj Kumar Dhoot, I pledge to re-align ASSOCHAM s strategic direction towards INDIA - Inclusive National Development through Integrated Agenda. ASSOCHAM, under your guidance, will continue to play a catalytic role in shaping the new India and bringing out issues which are of strategic importance and relevance to our Business, Economy, the Nation & the common man as well. Thank You Page 5 of 5