Business leaders from across sectors interact with Union Minister for Railways and Commerce & Industry, Piyush Goyal, during this edition of India Today’s e-Conclave 2020 Jumpstart series. The Cabinet minister hears the concerns of industry experts as India gears up to take steps in the direction of revival in the aftermath of the novel coronavirus outbreak and nationwide lockdown that succeeded it as well as the Centre’s push for “Aatmanirbhar Bharat”.
Sanjay Nayar, Partner and CEO of Kohlberg Kravis Roberts & Co (KKR) India, Chairman of the Feedback Infra Group, Vinayak Chatterjee, and Sajjan Jindal, Chairman and MD of JSW Group along with Chairman of the Boston Consulting Group (India) Janmejaya Sinha join India Today’s Rahul Kanwal for this exclusive interaction with Union Minister Piyush Goyal.
Rahul Kanwal: How can we hope to achieve the idea of self-dependent India?
Piyush Goyal: India over the last six years, has been on a fast-paced journey to reinvent itself. If one was to map each of the projects PM Modi has taken to the last man, the Jan Dhan-Aadhaar-Mobile trinity helped us with DBTs. Our efforts to expand the reach of digital India has reaped great dividends.
Aatmanirbhar Bharat is about bettering the quality of life of our people while engaging with the world.
Rahul Kanwal: How are you decoding Aatmanirbhar Bharat?
Sajjan Jindal: In 1991, the then government then took the initiative. India would not have been the way it is today had that govt not taken initiative during that crisis. The Modi govt is working really hard to make India a self-reliant country. We have a large scope for extracting minerals. We import over 200 MT of coal for power generation and we are sitting on top of so much coal that it would last us 200 years. India can be a major producer and export to the world apart from catering to domestic demand. With companies moving out of China, India can step in.
Sanjay Nayar: A lot of countries are looking to set up manufacturing units. People love India for its democracy, upholding of contract law. It is important to make business easy and the govt is working towards that. We need a robust banking system. Coming out, with these reforms, we can build on the opportunity. There is a certain amount of fragmentation in the approval process, if that can be centralised, a single window can be used to clear projects not just big ones but small ones. If anyone can do it, this govt can do it.
Rahul Kanwal: What is the difference this time around in India’s efforts to take business from China?
Piyush Goyal: The difference this time around is more. Public support is more and the rest of the world is looking for alternate strategies for supply chains and India stands out as a reliable option. The number of inquiries received by Invest India is massive. We have 600 active engagements ongoing right now, both Indian and international.
Rahul Kanwal: A report by the American Chamber of Commerce said that companies are sticking with China over their handling of Covid-19. Will they prefer to move out?
Janmejaya Sinha: World we will go back to is not the world we left. There is no way any country will be as dependent on China as before. The cold war between it and other countries will also intensify. There are going to be two technology standards. But the electricity costs and cost of logistics and the cost of capital interest are high in India and approvals are hard to get by, the unpredictability of policy are some of the issues.
Piyush Goyal: Teams of experts from FICCI, CII and ASSOCHAM have identified sectors that need help. We need to work with the states on the price of power like a standard price rate for 10 years or improvement of labour laws, giving single-window clearance. One of the first states that came forward was Uttar Pradesh, another is Goa working for sustainable products and Telangana also.
We believe the furniture industry alone has the capacity to expand to USD 50 Billion and can employ about 20-30 lakh people.
Vinayak Chatterjee: Different sectors of the economy have different needs. MSMEs were crying out for liquidity. The demand for semi-large and larger industries is to see demand stimulation. Govt has drafted relevant measures along with RBI to address the needs of MSMEs. Current flavour among India’s experts is public work projects, these programmes need to be kickstarted.
Piyush Goyal: Finance Minister had announced a pipeline for public works projects. These are ongoing projects. Govt is not static. Supply and demand go hand in hand. Interventions, big and small, will stimulate demand. We are looking at empowering people for a sustainable future.
Sanjay Nayar: If there is a centralised system of approvals, supply chains will come to India. The answer about capital is the development of local risk capital and pension funds and insurance funds can be unlocked, structured. We can then be truly self-reliant and not depend on China for investment.
Sajjan Jindal: RBI has reduced 200 basis points, the interest rate has not been passed on to the industry. To stimulate demand, one factor is liquidity, it has been addressed. If another 150 basis points are passed to industry, that could really stimulate demand.
Piyush Goyal: Govt will have to be more proactive. Credit guarantee schemes can be put to good use to encourage banks to lend to credible clients. We do not want another 2008 crisis. Some part of the demand will have to wait, some discretionary spending. My experience with exports says we will be coming back to normal very soon. We are in a very strong position with foreign exchange reserves.
Janmejaya Sinha: The nature of the recovery, 35 countries have been downgraded by rating agencies. We have a lot of fiscal space for monetisation that can be utilised and allow us to get ahead of the curve. Some of the reforms, like privatisation in UTs, is a big reform but we need to do something about aggregate demand. Debt phobia can be uplifted by DBTs and other measures. We need to create aggregate demand.
Piyush Goyal: We have tried to provide adequate food grains, gas cylinders, transfers to farmers have been expedited. Farm output is expected to grow. Foodgrain procurement programme has been expanded. We are trying to balance the requirements of different segments. We have to manage macro-economic stability. Dual balance sheet problem we saw in 2011-2012 should not be repeated.
Rahul Kanwal: How can we get migrant labourers back to the cities?
Vinayak Chatterjee: So far as the industrial workforce is concerned, once the level of angst subsides, most will come back but many won’t. Here is where public works programmes come in. One of them is the creation of six coastal economic zones.
Piyush Goyal: I can assure everyone that this is a listening govt that builds upon all consultation with all stakeholders. We should respect migrants wanting to go back and see their families. I am also sure that once they have seen that everything is okay in their villages, they would like to come back and see that their income levels are restored. Let’s make sure we give them proper shelters near plants, proper transportation, healthcare and social security for migrant workers. One of the bad aspects of post-1991 liberalisation is industries converging in cities and suburban areas.
Rahul Kanwal: What does govt hope to achieve land, labour and law reforms?
Piyush Goyal: It is a continuing process, it will be a calibrated approach. Railways, PSUs and states have a lot of land. We are encouraging growth centres. Land is not a problem, it has become much easier now. In terms of labour, our approach will be reasonable. We need tweaking in terms of regulatory processes. We don’t want an inspector raj to come back.
Source – India Today