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More Can Be Done To Reduce Cost Of Doing Business
Sanjiv Bajaj, the new President of the Confederation of Indian Industry (CII), the apex industry lobby, says India will have to counter global headwinds and inflation with robust policy reforms to unlock the growth potential of its economy.
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In a coversation with BW Businessworld, Sanjiv Bajaja tells on why CII is bullish on the economy and how India can grow at a healthy rate. Excerpt:
How would you sum up the mood of the Indian industry today?
Over the last two years we did see some amount of uncertainty. But now we are in a situation where there is some light at the end of the tunnel. There is a high level of positivity for the coming years. Unfortunately, the war (Russia-Ukraine) has been a spoilsport. It has caused economic disruptions. But India is primed for the next level of growth. In the past 4-5 years we did not see any large capex cycle for a variety of reasons. We are starting to see that now. Take sectors like metals, real estate, housing, transportation, among others. The investments have already started. More investments will come in the next couple of quarters. So a little bit of dark clouds will be there but once they clear out, more investments will follow. Already, the capacity utilisation is up to 70 per cent. These are all positive indicators.
Why is CII bullish on the India growth story?
Because of the changing geopolitical dynamics, India is at a much better place than before. The world is looking at India to become a manufacturing hub for them. It is because in India there is secure sourcing, safe sourcing and competitive sourcing as well. Through the PLI schemes, the government has already taken several initiatives to show what we can do. Add to that steps taken to improve the 'ease of doing business' parameters. At CII we are working on creating an index or scores for states. I will be in Davos next week and we have four-five states there looking to attract investments etc. Around 10-12 years ago, possibly one state used to go out for such initiatives.
We are at the cusp of a super cycle that will last for next 20-25 years. Look at China. Their society is beginning to age now. Plus because of high growth in the past two decades people have become richer. The labour costs are going up there. So India is now getting ready to play that role for the world. But we have to take more measures to capitalise on this window of opportunity. Else, other countries, smaller countries can take that leap and move ahead.
We believe employment-linked incentive schemes for select services sectors which have high growth potential can generate jobs and can earn foreign exchange. To start with ELIs could cover Tourism, Logistics, Retail and Film, Animation & Gaming.
Manufacturing and services are the engine driver for the economy. What more can be done to invite international players to set up manufacturing plants in India?
A lot of CII suggestions made in the last two-three years have been adopted. The PLI scheme, for example, is a CII suggestion. We at CII have gone through at least two cycles of suggestions and recommendations on rules, laws and norms that need to be changed, modified or done away with. The government is working on these quite aggressively. More can be done like reducing the cost of doing business (CoDB); further improving ease of doing business (EoDB); decriminalising the businesses facing laws and de-clogging the judicial system. It is very important for the companies to know that courts are available not only for providing justice but in a time-bound manner. These steps are necessary to further strengthen the business and investment climate in India.
Can you clarify the recommendation for setting a GST council type body for consensus building on reforms such as land, labour, power and agriculture? Will industry get a representation on such a council?
From the regulatory perspective, there will be governments both at the Centre and in states that can come together and discuss issues that impact everyone. Industry bodies are always working closely with the state governments and the central government. We will do our bit but a focused approach between the governments will help.
Which are the CII initiatives currently underway and expected to be finished this year?
CII has planned several new initiatives in the current year including setting up centres on some important themes for the economy. These include ‘CII Centre for Risk Surveillance’ to monitor and forecast impact of future waves of pandemic, thus enabling preparedness and resilience in growth; ‘CII Incubation Centre’ at Hyderabad which will organise startup accelerator programmes in partnership with corporates --CII has 300 corporate mentors to support its Corporate Mentorship Programme for Startups; ‘CII Centre of Excellence on Design and Intellectual Property Rights’, with a vision to develop India into a hub for IP driven industries. CII will skill 1.5 lakh people this year and help with their placements. We are also coming out with a 'Cost of Doing Business' for the states this year itself. CII will also be setting up four labour facilitation centres.