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Industry in praise of Modi’s two years of governance

Monday, May 30, 2016
By Dominic Rebello

Over the past two years, the Government’s emphasis on five key building blocks – policy reforms, procedural reforms, global outreach, devolution of power to states and a clear ambition – have helped India move on to a higher and a sustainable growth trajectory. And if this continues, there can be nothing else, but better days ahead for India…This summarizes the views of India’s industry captains

“In two years, the NDA government has strategically navigated the Indian economy to all-round stability. It has undertaken ‘big bang’ structural reforms including more power in the hands of states, establishment of NITI Aayog and empowerment of markets,” said Chandrajit Banerjee, Director General, Confederation of Indian Industry (CII), while felicitating the Government on completion of two years.

For investors, critical achievements of the Government relate to inflation control, more public investment in infrastructure, social security, fiscal management, and tax administration, said Banerjee. The strong emphasis on Ease of Doing Business is delivering results, he added, pointing to highest-ever inflow of FDI at $55 billion in 2015-16. The multi-pronged strategies go a long way towards building the new foundation for sustained growth and transformational development.

Reining in inflation has reinforced confidence in the Government’s economic management, added Banerjee. “CII compliments the Government for deploying varied levers for managing inflation, possibly the most critical confidence-booster for the economy,” he stressed.

“The scale and content of economic reforms from the Government in the past two years has been very healthy. Industry believes that the range of policy actions across various economic dimensions sets a very strong foundation for future growth,” said Dr. Naushad Forbes, President, Confederation of Indian Industry (CII).

Identifying major policy measures in the areas of taxation, ease of doing business, public-private partnerships, and financial sector, among others, Dr Forbes emphasized that the Government has taken a series of steps that together add up to a renewed business environment. “With demand conditions picking up on a normal monsoon, investment will turn up in the coming 6-9 months, kick starting a new growth cycle,” he added.

“Targeted and comprehensive interventions in infrastructure with faster clearances have got delayed projects moving, particularly in the road sector,” said Dr Forbes. He commented that lead sectors such as cement, steel and power are firming up, indicating pick-up in construction activity. Besides, campaigns such as Make in India, Smart Cities, Clean Energy, Namami Gange and others add to infrastructure creation.

The CII President highlighted the Government’s initiatives in social security through empowerment and new opportunities. “We commend the Government for rolling out direct benefits transfer which reaches subsidies to the needy sections of society, prevents leakages and provides for substantial savings in spending,” he stated. The success of large-scale social sector schemes such as Jan Dhan Yojana, Skill India, Pradhan Mantri Suraksha Bima Yojana, Pradhan Mantri Jeevan Jyoti Yojana, Atal Pension Yojana, and Ujjwala Yojana will promote inclusive growth, he felt.

 Rural India will benefit from emphasis on irrigation and infrastructure connectivity, added Dr. Forbes. Besides, integration of agricultural markets, soil health cards and rural housing program will add to rural prosperity and demand.

Adi Godrej, Chairman, Godrej Group, was similarly optimistic and said “Industry felicitates the Government on a very successful tenure so far. The macroeconomic stability and robust growth have been results of some very deft economic management by the government with focus on continuous process of reforms. In the same spirit, the Government has been working well on the plan to roll out GST. However, one area that the Government needs to focus on is on Building Political Consensus so that the GST Bill is passed in Rajya Sabha. GST is a landmark reform which will straight away add up to 1.5% to the GDP growth and will give the necessary fillip to most of the industry sectors of the economy and the States as well. I think all political parties should keep their differences aside to converge on this landmark reform, which is in the best interest of every segment of Indian society.”

Shobana Kamineni, Executive Vice Chairperson, Apollo Hospitals Enterprise Ltd. said, “The Jan Dhan Yojana, MUDRA scheme, Pradhan Mantri bima yojanas, crop insurance, Ujjwal yojana for free LPG connections, etc are all directed at improving the lives of the poor. Industry believes that such targeted social sector interventions will help alleviate poverty and improve human development.”

Rakesh B Mittal, Vice-Chairman, Bharti Enterprises, said “In a welcome strategy, the government has targeted infrastructure construction through public investment including roads and highways, railways, and urban facilities. Public-private partnership models in infrastructure and new financing routes have been initiated. Infrastructure is the new sunrise sector in India today.”

Ajay S Shriram, Chairman & Senior MD, DCM Shriram, believes “The government has taken up a catalytic reform agenda across multiple domains since assuming charge - whether it is legislative as in the Bankruptcy Act, procedural as in direct benefits transfer, or systemic like transparent auction of resources. The power sector reforms for coal supply, financial health of discoms under the UDAY scheme and additional capacity building are bold and innovative.”

Rajiv Memani, Country Managing Partner, Ernst and Young, said “The government recognizes the fact that reforming the tax system is critical to improve ease of doing business, attract investments and spur growth. In the past two years, the Finance Ministry has taken several determined measures to simplify and rationalize the tax regime and improve the dispute resolution mechanisms. Most noteworthy has been the focus on encouraging innovation and domestic manufacturing as have been the initiatives to curb black money and bring transparency.”

“The holistic reform process initiated by the Government over the past two years has been unprecedented and resonates the unwavering commitment to realize the vision of sabka saath, sabka vikas”, says Harshavardhan Neotia, President, FICCI.

According to him, “The macro-economic situation has seen a lot of improvement and we are on a firm footing to accelerate growth further. Government has made an earnest effort to address some of the most pressing challenges at hand in order to strengthen the key levers of the economy. India’s GDP has witnessed a steady increase and is expected to grow at a healthy pace even amidst a fragile global economy. Inflation has been range bound with the Government making concerted effort to check the pressure points on prices. Further, the resolve to stick to the fiscal deficit target has send a positive message to the international community”

“This improvement has been a combined result of a well laid out strategy and a good implementation plan. The Government’s emphasis on five key building blocks – policy reforms, procedural reforms, global outreach, devolution of power to states and a clear ambition – have helped India move on to a higher and a sustainable growth trajectory,” he added.

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