Familiarisation visit of Sids journalists to India |11 August 2014

Indian industry plans strong revival package for economy

India needs to take quick and impactful steps that will help revive its economy.

This came to light during media interactions between senior directors and principal economists at the Confederation of Indian Industry (CII) in New Delhi and journalists from Small Island Developing States (Sids) who were on a familiarisation visit to India.

Several points in the CII’s plan of action have similarities to what Seychelles intends to do to again re-launch the economy in a more innovative and inclusive way.

In India there is a need for strong revival package which will encourage investments, business and entrepreneurship. The CII has proposed to the government to carry out systematic reforms quickly as it was felt that India can achieve a GDP growth rate of 6 percent provided the right eco-system is created. Steps such as early implementation of GST, easing interest rates and restructuring labour laws to promote mass manufacturing would go a long way in creating an environment conducive for economic growth.

In fact the CII has proposed an economic agenda which will review and monitor projects at state level: a stronger inter-ministerial coordination group to resolve sticky issues like mining, raw material securization for sectors like steel, etc; an institutional mechanism to renegotiate the terms of concession in Public Private Partnership (PPP) contracts to salvage stranded investments; expansion of e-governance and technology-based initiatives to simplify processes, and online monitoring of application forms; time-bound approvals by introducing ‘deemed approvals’ in case of delays beyond prescribed limit; restructuring labour laws including introduction of hired manpower on short-term assignments

As India readies itself for another phase of development with a new government at the helm, it is poised at an interesting juncture. There have been a host of rapid changes with far-reaching consequences – the gap between villages and cities have narrowed as migration has led to faster growth in urban.

 population; technology has emerged as an enabler cutting across class and geographical boundaries; millions are ready to join the workforce every year and, for the first time in the country’s history, more people are deriving their livelihood from non-agricultural work than from agriculture.

Never before have there been such rapid changes and rise in aspirations. To meet the aspirations of this upwardly population, it is essential to create productive jobs. Such changes in the workforce matrix necessitate job creation, and the objective is to create 50 million jobs over the next decade and this will require active and determined participation from the government and industry in order to capitalize on the ‘demographic dividend’.

Therefore India’s CII’s theme for 2014-15 is ‘Accelerating Growth, Creating Employment’ focussing on the following areas: the education system; skill development; economic growth; manufacturing sector growth; investments; ease of doing business; export competitiveness; legal and regulatory architecture; labour law reforms and entrepreneurship.

The CII has also recommended the acceleration of growth and creation of employments in all the above-mentioned areas.

In the field of ‘ease of doing business’ the CII has recommended the following to the Indian government:

• Rationalise compliances and introduce self-certification

• Introduce e-governance and technology-based initiatives to simplify processes and online monitoring of application forms

• Enforce time-bound approvals by introducing ‘deemed approvals’ in case of delays beyond the prescribed limit

• Strengthen coordination between Central and State Pollution Control Boards

• Clarify non-applicability of Transfer Pricing regulations to transactions not resulting in taxable income or taxable income or tax deductible expense in India e.g equity infusions, transactions with regard to foreign companies

• Pass Single Window Act and standardize documentation for procedures and approvals related to starting a business, environment clearances, etc

• Establish Environment Compliance Assistance Centre in the states to facilitate information exchange between regulators and industry, and provide technical assistance to industry for meeting compliance requirements

• Encourage and promote the establishment of industry clusters, through a well-defined, targeted, cluster development policy, owned and driven state and local governments

• Revise peridodically environmental norms to keep pace with technology and environment

• Have consistency in taxation approach – uniform interpretation and application of the law and judicial pronouncements with emphasis on restricting practice of retrospective amendments

• Move away from the revenue-generation aspects of Customs – focus on anti-dumping and border security.

Compiled by M. Julie