‘Businesses Have A Key Role In Driving India’s Green Transition’
What is your assessment of India's GDP growth performance, and what role do you see the private sector playing in sustaining and accelerating this growth in the coming years?
The acceleration in GDP growth to 7.2 per cent in 2022-23 as compared to advance estimate of 7.0 per cent is encouraging. The strength in the full-year number is attributable to a rise in domestic demand drivers of consumption and investment despite a high base. The latter is salutary and will drive bulk of the growth in the current year too. The private sector is expected to compliment the public sector by partaking in driving the overall capital investments in the economy. This, we feel, will kickstart the virtuous cycle of boosting the exports momentum too.
How do you perceive the current state of investment from the private sector in India, and what measures or reforms do you believe are necessary to attract more domestic and foreign investments?
Private sector investments are slowly but steadily recovering, with capacity utilisation having crossed trend levels in several industries. The CII Business Outlook Survey for the fourth quarter of 2022-23 affirms fresh sightings in private investment, with majority of the respondents expecting capacity utilisation levels to be between 75-100 per cent in Q4FY23. Going forward, India must continue to build its infrastructure. The focus on ease of doing business, cost of doing business and decriminalisation of business and economic laws should also continue.
We need to make progress on factor market reforms – land, labour and power. Here consensus building with states is crucial for which CII has suggested setting up formal and informal mechanisms for each of these areas.
Reforms for lowering cost of funds are important. These include channelising long-term pension and insurance funds into capital markets and creating innovative avenues for growth capital from banks.
As the CII President, what specific initiatives or policies do you believe should be prioritised to enhance India's manufacturing sector and make it more globally competitive?
The global environment is just right for India’s manufacturing ambitions. with the global supply chains looking at new destinations. India’s large and growing domestic market, a stable political and policy regime, rule of law, sound macroeconomic fundamentals and India’s track record as a trusted partner, all make India an attractive destination for the shifting global supply chains.
The reforms I mentioned earlier are necessary to take ‘Make in India’ to a new level. To enable availability of industrial land, the India Industrial Land Bank (IILB), may be evolved as the National Level Land Bank.
The CII has been instrumental in shaping policy discussions and reforms in India. What specific recommendations or advocacy efforts do you plan to make to further improve the business environment and foster entrepreneurship in the country?
The CII has been working very closely with the government on various reforms and other initiatives. At the macro level, the capex-led growth strategy of the government has been in sync with CII suggestions; in fact, the capex number announced in the last Union Budget was exactly what CII had wished for. We have been working with the government on ease of doing business, decriminalisation and sustainability, and many of our suggestions have been actioned. We also work with the government on many sectoral issues, and have been able to make a contribution to some of the important sectoral policies and initiatives. In terms of our advocacy agenda, we will continue to work with the government in all of these areas, and also on the reforms, which I spelt out earlier.
What role do you believe the CII should play in facilitating skill development and bridging the gap between industry requirements and the education system to ensure a well-prepared workforce for the future?
The CII along with its membership has been focusing on demand-led skilling, re-skilling and up-skilling to improve workforce productivity and also making a social impact.
The advent of Industry 4.0 and digitisation necessitates greater focus on developing Industry ready workforce.
The CII is mapping new and emerging job roles in relation to future of work, will lay out standards and help develop curriculum. Industry-academia connect is an important part of this, wherein industry is helping build capacity of trainers at both school and higher education level. We are imparting soft and employability training as well as career counselling to youth. The CII is also promoting internships and apprenticeships, benefiting about 20,000 youth.
The logistics and supply chain sector is crucial for India's economic development. What steps do you think should be taken to improve the efficiency, infrastructure, and connectivity within this sector, and what role can the CII play in supporting these efforts?
The government’s thrust on connectivity and logistics infrastructure through initiatives such as the National Infrastructure Pipeline and Gati Shakti will bring down logistics costs. Going forward the focus should be on effective operationalisation of the National Logistics Policy. Other imperatives include use of multi-modal logistics and shift towards less carbon-intensive modes such as waterways and railways, better utilisation of infrastructure and logistics assets (such as warehouses and trucks) and promoting standards in logistics such as warehousing standards and truck body sizes.
The CII has been actively engaged with the government in formulating the logistics policies at the central and state levels. The CII can play a key role in improving efficiency of the sector by providing industry inputs for the effective implementation of PM Gati Sakthi Master Plan, developing standards and promoting their implementation, developing solutions for green logistics and skill development in the sector.
ESG issues have gained significant attention globally. What measure or strategies do you think Indian businesses and the CII should adopt to address ESG challenges effectively and promote sustainable growth?
Businesses face ESG challenges at two levels: one, at own-business level and two, at the macro level. The starting point for addressing own business ESG challenges is to assess the ESG risk exposure and then chart out short-term and long-term strategic actions to manage the exposures. Macro-level challenges are several, such as increasing regulatory push, increased focus of investors on ESG, lack of universal standards/ frameworks on ESG disclosures, increasing consumer expectations. To a large extent businesses can deal with macro-level challenges if they have mapped their risk and taken action.
The CII is helping businesses understand their ESG risk exposures, identify and prioritise ESG gaps, prepare plans and ESG reports. The CII has developed specialised tools on ESG diagnostic assessments through its Centre of Excellence on Sustainable Development.
With the rising awareness of climate change and the need for decarbonisation, how do you see the role of the private sector in driving India's transition to a greener economy, and what are the key challenges and opportunities in this regard?
The key challenge in this transition is to manage decarbonisation without impacting growth. Financing the transition will need mobilising capital from and creating the pull for investments. The CII is working on defining sectoral pathways and creating a pipeline of investment opportunities. It is equally important to build climate resilient infrastructure and the CII has suggested allocation towards this in existing infrastructure programmes. Businesses have a key role in driving India’s green transition.
They should adopt low-carbon technologies and decarbonisation solutions such as green hydrogen and carbon capture, utilisation and storage. Businesses have a role in innovating on low-carbon technologies. For example, India’s success with solar has been a combination of favourable government policies backed by industry innovation and on-ground implementation.
