‘Push Towards Digital India’
In an exclusive interview with BW Businessworld, Bharti Enterprises Vice Chairman, Rakesh Bharti Mittal, now President of the Confederation of Indian Industries (CII), tells Anurit Kanti that the economy is getting “better and better”. Excerpts of a freewheeling conversation on a range of topics from corporate investment, the ease of doing business in India, data breaches and sustainability:
How does the economy look to you right now?
Well, I would say things are better and getting much better. More importantly, if we look at the global economy, and the Indian economy, for the first time what I see is, there’s a synchronisation in the growth patterns. The world GDP growth is moving up, at about 3.7 per cent. Emerging markets are at about 4.6 per cent, India is at about 6.7 per cent in 2017. And the IMF projections for 2018-19 is anywhere between 7.2 per cent and 7.7 per cent. So, it is predicting a good positive growth as I see it.
And more importantly, we are talking of India becoming a $5 trillion economy by 2025. This is something that is doable, given that there are many sectors that are starting to do well. The auto sector is doing good. In rural areas, tractors are doing very well. At the back of infrastructure spending by the government, cement and steel are doing extremely well. Fast moving consumer goods (FMCG) companies are clocking a good, healthy growth month-on-month now.
Demonetisation and the impact of the Goods and Services Tax (GST), are all behind us. So going forward, all the indicators are looking positive. So I am very, very - if I may say so —- very, very bullish on the Indian economy growth.
So what do you think is the reason why Indian corporates are not investing enough?
It is because of the absence of consumer demand, lack of good monsoons, demonetisation, GST… I think these were the three or four events which held the consumer back. Families were only spending on necessities. But in the last year, we are clearly seeing that fast moving consumer goods (FMCGs) have come back to where they were or almost were. I met two or three of my friends who are in the business of manufacturing tractors, and they say they are full of orders. So, that clearly shows that rural demand is coming back.
Fast moving consumer goods are something that go to every nook and corner of the country and that sector has come back to where it was. On the back of infrastructure, cement and steel are doing well. I think the incentives for low-cost housing and all, the real estate sector, the Real Estate (Regulation and Development) Act (RERA) is already in place. So, to my mind, the government is doing its part very well. I think it’s now for industry to come forward. I believe, Indian corporate investing is set to increase and I believe it will start happening now.
We did a couple of surveys and we found that not enough has been done on the ease of doing business in India. What are your thoughts? What more needs to be done?
I don’t agree with that statement. If India has jumped 30 ranks (on the Ease of Doing Business Index) between the two World Bank surveys — that clearly says that we have done a lot on the ease of doing business in India. If we go to the data points of setting up industry, and are now doing something in a number of days that used to be done in a number of months, or a year, or beyond. I think that is something that is very good.
And more importantly, the Digital India programme, digitisation of everything and bringing everything online, will bring in more transparency. And I think that is what is required, if you can do all your business, all your government business — if I may say — without going to an office, it is something that is very good. Today, income tax returns are filed online. The funds come online. It’s a dream, to my mind.
And that is something that government and the taxation department has done very well. The Finance Minister has done very well. So, a push towards Digital India will improve the Ease of Doing Business.
What do you feel about the recent incidents of data breaches?
I think when we are looking at new technologies, we’re talking of digitisation, we’re talking of online transactions - we must make sure that there are enough safety measures put around. That’s the first thing. Cyber crime and cyber security is something in which all the governments across the world are engaged in. And industry must also look at investing significant amounts on this. This will be one thing, which will be a huge area of concern going forward.
What are the challenges before the economy today?
If I look at two or three things, one is the temptation to spend more in a pre-election year by governments, which I believe should be done judiciously. On the fiscal deficit, we are happy that the government - the Finance Minister - has maintained it at 3.5 per cent.
I think what we are talking about is equality of fiscal deficit. There should be more capital expenditure going forward.
The second risk factor is high oil prices. Rising oil prices is something that I am sure the government is engaged with. But the good thing is, we have the first shipment of oil and petroleum products from the United States’ shale gas production. If that can support us, it mitigates the risk (of high oil prices).
It doesn’t eliminate the risk, but it will mitigate it to some extent, given the rising demands for energy. So, these are the basic risk factors that I see.
What do you think of India’s position on sustainability? Do you think there will be a push towards sustainability in the next few years?
Certainly yes. I think Corporate India is showing its responsibility in sustainability, the government is as well. But of course, we all need to do much more. And when you see Prime Minister Modi leading the International Solar Alliance, these are the things we are very happy about and proud of. And what I am also happy about is that India is sitting on a high table globally - talk about policy, policy measures, resolutions - I think it’s a very good thing.
