India’s Economic Surge
India Inc. has outlined a 14-point policy agenda for the new government aimed at driving the next phase of economic transformation
Projecting a robust outlook for the Indian economy in the current year, Sanjiv Puri, the newly appointed President of the Confederation of Indian Industry (CII), the apex industry body in India, expects the growth rate to touch 8 per cent, marking the fourth consecutive year of above 7 per cent growth. Despite being above consensus estimates, Puri highlighted India's consistent outperformance of initial predictions, attributing this to several key factors. Puri is also the Chairman & Managing Director of ITC, a diversified FMCG conglomerate with its home base in Kolkata.
Interacting with BW Businessworld, Puri emphasised the importance of addressing the unfinished reform agenda, improving world trade prospects to boost exports, and the twin engines of investment and consumption, along with a normal monsoon, as critical to achieving the projected growth. This was Puri's first media address since taking over as President of CII.
Puri detailed six key growth drivers propelling India's stellar economic performance. These include private sector investment, public investment in infrastructure, a well-capitalised banking system, a booming capital market, reduced dependence on oil, and favourable geo-economic conditions. He stressed that these factors have positioned the Indian economy in an "accelerator mode," enhancing its resilience despite global headwinds.
Strategic Reform Agenda
In his interaction, Puri outlined a 14-point policy agenda for the new government aimed at driving the next phase of economic transformation. He emphasised the need for next-generation reforms at the state and concurrent levels, suggesting the creation of inter-state institutional platforms akin to GST Councils to facilitate consensus building.
Puri urged the government to continue its capex-led growth strategy alongside fiscal consolidation. He proposed using a portion of the RBI's windfall dividend of Rs 2.1 lakh crore to increase capital expenditure by 25 per cent in FY25, up from Rs 9.5 lakh crore in FY24.
“Investing in human capital is critical for inclusive growth and industry competitiveness,” Purisaid. He recommended roadmaps to increase public health expenditure to 3 per cent of GDP and education to 6 per cent of GDP by 2030, along with a focus on skill development initiatives.
Recognising India's young demographic, Puri called for quality employment and livelihood generation to meet the aspirations of the youth and drive demand generation. He proposed employment-linked incentive schemes for labour-intensive sectors with high growth potential, and an International Mobility Authority to facilitate employment opportunities abroad.
Enhancing Competitiveness
Puri emphasised the need to strengthen the Ease of Doing Business to enhance the competitiveness of Indian industry. He called for easing the regulatory and compliance burden, simplifying approvals, and improving the alternate dispute redressal system. He also suggested reducing costs in areas like land, power, and logistics.
Technological advancement is pivotal for India's growth, Puri noted. He advocated for the operationalisation of the Rs 1 lakh crore fund for innovation R&D in the private sector and stressed the importance of increasing India's global footprint through deeper integration with Global Value Chains.
Green growth is both an opportunity and a necessity, according to Puri. He urged the government to develop an action plan for tackling climate change, emphasising de-carbonisation plans, water security, and a Green Transition Fund.
Addressing the financial sector, Puri highlighted the need for rapid expansion to support the funding needs of a growing economy. He recommended privatising two public sector banks, diversifying funding sources for non-banking financial companies, and reviewing the priority sector lending framework.
Tax reforms are essential to boost investment and competitiveness, Puri said. He suggested rationalising capital gains tax and TDS provisions and expediting the next set of GST reforms.
Puri called for a concerted focus on agriculture through an Inter-state Agri Reform Council and steps to boost farmers' income and reduce waste. He also emphasised the importance of rural development through industry engagement and the creation of rural industrial parks.
Tourism, a key priority sector for growth and employment, should be boosted through a National Tourism Policy and an Incredible India 3.0 marketing campaign, Puri said. He also suggested creating infrastructure for start-ups and simplifying regulations to foster innovation.
Building an environment of trust through transparent, faceless, digital systems of approvals and appeals is crucial, Puri concluded.
The CII has identified "Globally Competitive India: Partnerships for Sustainable and Inclusive Growth" as its theme for 2024-25. New missions include Climate Adaptation, Health for All, Responsible AI, and Digital for Social Good. Initiatives like the CII Alternative Dispute Resolution Centre and the CII-Rahul Bajaj Centre of Excellence on Skills will further strengthen India's economic foundation.
These efforts, Puri asserted, will set the Indian economy on a robust track, paving the way for a prosperous future as the nation approaches its centenary.
