India Inc India Inc: Tuesday, 03 January 2012 15:20

Five on Five - B. Muthuraman

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Manoj Ladwa speaks to B. Muthuraman on the business of growth...

Muthuramanedited 1.·Is there still a role for trade organisations like the Confederation of Indian Industry (CII), given the world is much flatter now?

Industry associations have a major role to play, more so today when the world has become "flatter”. The role has changed from purely industry centric to more influential global strategy.

If you look at key multilateral groupings like the G20 or the WTO or for that matter the entire global discussions on climate change, industry associations have played and continue to play a major role in helping governments to finalise their strategy. CII leadership has been involved in all these strategic dialogues. Trade organisations have to re-orient themselves to facilitate the conduct of business in a fair and free manner.

2. You have recently been elected as CII president. What do you see as your challenges and goals for the coming year?

CII has recently announced a five-pronged strategy for 10 per cent growth focused on fast track implementation of 100 mega projects, targetting manufacturing growth at 12 per cent and its share in GDP at 25 per cent, creating a common market, improving the investment climate and creating a better mechanism for allocation of natural resources.

A project monitoring and implementation agency set up by the government with specific timelines on implementation of these projects is required.

There is a need for rapid export-led growth, enhancing labour productivity, building depth and driving the right industrial structure in terms of creation of clusters to drive scale and depth and productivity advantages and capacity building for start-ups and SMEs in addition to encouraging the development of innovation clusters.

India remains a fragmented market and, therefore, all efforts have to be made to make it a single market. Improving the investment climate is another area of focus  as India is still perceived as a difficult place for doing business as several state government laws and procedures create regulatory hassles and inhibit investments.

Enhancing transparency, efficiency and sustainability in the allocation and pricing of natural resources would be of pivotal importance.

For the high growth to be inclusive and sustainable, it is important to have a prioritised focus on affirmative action, employability and governance. Future growth is expected from the bottom of the pyramid and hence faster inclusive growth and development is important to sustain high GDP growth.

There is a need for scaling the skills development efforts given the magnitude of the employability problem. CII will set up of four new CII skill development hubs and up to 30 new district-level skill gurukuls as Skills Development Centres. In addition to these, there is a need to create a national vocational qualification framework in consultation with the government, ILO and the World Bank to integrate the academic education system with the vocational training system.

3.·Is corruption an issue for your members? Will the Lokpal Bill solve matters? 

CII has always stood for integrity, transparency and clean conduct of every transaction that takes place in the country. Giving primacy to the issue, CII has also set up a National Task Force on integrity and transparency in governance under the chairmanship of Mr Adi Godrej, chairman, Godrej Group, to ensure that Indian Industry can be galvanized on this issue to ensure that industry can do its part in ensuring that corruption is dealt with comprehensively in the country.

There are examples within the Indian corporate sector of how businesses can be conducted without having to succumb to the pressures of resorting to unfair and corrupt practices, and yet be competitive. It is fortunate that in India there are enough people within and outside the government, industry and civil society, who recognise corruption as being the single largest scourge affecting the country and, therefore, a cathartic movement is taking place with spontaneous support from all sections of society.

CII stands firm on the fight against corruption and welcomes the developments leading to a draft Lokpal Bill.

It is indeed fortunate that India is recognising the issue in time for it to be dealt with. This is in a way better than what the situation is in many developed and emerging economies, which seem to be in denial.

4.·What is the one major reform to India's FDI policy you would like to see implemented soon, and why?

One window for all clearances. For example, in case of Infrastructure investments in roads and highways, the government can set up a system whereby once a company finalises an investment project, all approvals - from central to the state governments or different ministries - are all arranged with the help of a government agency facilitating the FDI project.

5. Are you optimistic about the high growth outlook for the Indian economy for the next fiscal year?

CII has projected GDP growth for 2011-12 in the range of 8.0-8.5 per cent.

B. Muthuraman is the president of the Confederation of Indian Industry (CII), India's key industry chamber. He is also vice-chairman of Tata Steel Ltd and chairman of Tata International Ltd.   

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