Shri Narendra Modi, Hon’ble Prime Minister of India while outlining his vision for an Atmanirbhar Bharat stated that he was confident that India would get its growth back very soon. The Prime Minister was addressing the Confederation of Indian Industry’s (CII) Annual Session 2020: Getting Growth Back.
In his address, he stated that the concept of an AtmaNirbhar Bharat rested on 5 I’s - Intent, Inclusion, Investment, Infrastructure and Innovation. He stated that while announcing the relief package during the coronavirus crisis, his government took a long-term view of the economy and announced several far-reaching measures to reform the economy. The Prime Minister suggested that CII should prepare a detailed study of every sector and develop growth plans. CII should assist and support the next level of growth.
CII’s new theme for 2020-21 Building India for a New World: Lives, Livelihood, Growth was unveiled by the newly elected president Uday Kotak at a press conference held on a virtual platform. Emphasising on the imperative to bring back growth, the CII President said, “Growth is a necessity that should lead to creation of more jobs while CII works as a knowledge partner with the Government for building self-reliant and competitive India that is deeply engaged with the World”. CII’s press conference comes a day after its special Annual General Meeting held, for the first time, on a virtual platform, as CII commemorates and celebrates 125 years.
The CII has laid out a 10-point road map to revive growth in India post pandemic crisis:
1.Protecting lives and livelihoods
Economic revival will entail an infrastructure revamp in response to the new post pandemic world. Labour and regulatory reforms are much needed to protect livelihoods and to formalise the nearly 80% of employment in informal sectors. As announced by the PM, labour reforms would be brought in the coming days, with a few states already having announced new labour laws.
2. Prioritisation of Healthcare and Education
The current public health spending needs a boost from 1.3% of GDP. A long-term strategy involving high quality preventive healthcare, focus on nutrition, sanitation and hygiene along with high quality interventions of tele-medicine, e-healthcare and e-education needs to be established to address crises including pandemics.
3. Mother nature
The pandemic, natural calamities, locust attacks and spread of disease calls for maintaining harmony with nature. India has been at the forefront of climate change mitigating measures; however, we would need to deepen our work and accord attention to sustainability in all our economic activities. This is one area that CII has been engaged in deeply in many of our activities as we have helped industry adopt sustainable business operations be it in energy usage and conservation, water use and emissions through our Centres of Excellence.
4, Fiscal deficit and financial stability
Government spending for substantive economic recovery, is crucial which implies higher fiscal deficit and rising public debt that runs the risk of rating downgrades and flight of capital besides leaving the currency vulnerable. Financial stability as well as finding a fine balance will be of utmost importance at this crucial juncture as various stressed sectors of the economy will look for relief and stimulus packages.
5. Distribution of economic pain
The pandemic has caused significant loss to the economic systems including individual & businesses, Governments and the financial sector. A battered industry will need support from government in many forms, including investment friendly policies that will drive demand and measures to help tide over the liquidity crisis.
6. Role of digital and physical
The shift to digital during COVID from physical will have a lasting impact in the post COVID times in terms of consumer behaviour. As industry find new business models, the role of Science and Technology becomes important. This tilt in favour of the digital, also has the potential to widen the rural versus urban divide. The rural population is less skilled to participate in an economy with higher digital component and bringing digital skills to rural India is key to enhance rural jobs. The bright side is that connectivity to hinterlands through the telecom and digital services is growing significantly and this can be built upon to work on a more inclusive agenda.
7. Future of jobs and social security
CII will work closely with Government to provide incentives and facilitation to companies wanting to shift their manufacturing operations out of China as part of their de-risking strategy. This will help India develop as manufacturing hub for the world. In addition, front loading of the National Infrastructure pipeline will not only create demand for industries like steel and cement but will also provide jobs. Government’ focus on enhancing agriculture infrastructure, linking farm produce to markets by APMC reforms will also help increase farm incomes and livelihoods.
8. Rural-urban re-balance
For the first time in India, reverse migration was experienced with migrant workers going back. Industry should be encouraged to set up operations in the rural hinterland. The reforms announced in the minerals and mining sector should be expedited as most mining projects are in rural areas. Similarly, development of agro based clusters could be expedited in rural areas. A vibrant rural industrial sector will also de-risk the impact of COVID on economic activities as spread of COVID is far less in rural areas. Further, industry and government should make available amenities in terms of housing, education and healthcare for workers who chose to come to the cities to work.
9. Four levers for growth:
Out of the four engines of growth – consumption, investment, net exports and government spending, the economy has been primarily growing on government expenditure, which is unsustainable and puts pressure on fiscal situation. Hence, it is essential to re-start the other engines of the economy. Given demand uncertainties, private investment remains a challenge. Exports need a quantum jump and to achieve this integration with global and regional value chains is important besides being competitive.In this scenario, CII will continuously deliberate on how the private sector can play a role in igniting the growth engines of private investments, exports and the forces of entrepreneurship.
10. Getting growth back is non-negotiable
Getting growth back is essential to protect as well as generate jobs and livelihoods. CII will work intensely and closely with all stakeholders to bring back investments. Government spending in public infrastructure and direct benefits cash transfers may help boost demand initially but we need to find ways to sustain demand particularly in such uncertain times when consumers tend to save and get risk averse. The need of the hour is for government and industry to work together to return to a sustainable growth path.
