08th March, 2010 to 14th March, 2010
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Challenges in Public Health in India and South West Asia
Delhi, March 11, 2010 “India’s total health care spending (1.3 % percent of the GDP) is way below most developed countries. At the same time, over 80 percent of the health care spends is in the private sector. There is a huge need to focus attention and energy towards basic public health issues in the country such as malnutrition, accessibility to potable water etc, which were a cause for huge morbidity and mortality. He mentioned that malnutrition was a big health issue in India especially keeping in mind that in years to come we would have a huge young population in the country. The Hon’ble Member of Parliament B J Panda shared his thoughts while addressing the conference “ Challenges in Public Health In India and South West Asia – The Case for Developing An Action Agenda “, organized by CII and Friends of the Fund- South and West Asia of the Global Fund for HIV/AIDS, Malaria and TB.
The conference was organized by CII and Friends of the Fund- South and West Asia to highlight the issues in public health, which needed to be addressed in the Region. The network of Friends organizations supporting the Global Fund is as unique as its partnership model, providing different groups of stakeholders with equal rights of decision-making at the global and at the country levels. The uniqueness of the Friends is the fact that it is a private sector led fund with its secretariat in Confederation of India Industry (CII). At this occasion the Hon’ble Member of Parliament also released the report “ Best Practices By Corporate Sector in Health Prevention and Management- South and West Asia “.
Mr B J Panda emphasized the need for more engagement of stakeholders on social issues especially with the global stewardship of MDGs and cooperation to fight pandemics.
Prof Ranjit Roy Chaudhury in his address highlighted the findings of the National Macro Commission on Health in his address at the inaugural session. He spoke of the need for rational use of medicines, the huge gap in provision of medical services in India etc.
Mr Tarun Das, Chairman, Friends of the Fund- South and West Asia in his opening remarks acknowledged that, much work in health still remaining an unfulfilled.
Mr. Taufiqur Rahman, Regional Team Leader, Global Fund highlighted the role and focus of the Global Fund in the South and West region countries. To date, it has committed US $ 19.3 Billion in 144 countries to support large-scale prevention, treatment and care programmes against the three diseases.
Dr S J Habayeb in his address gave a brief overview of engagement of WHO in health in India. He advocated the need for partnership between the public and private sectors in Health.
In his concluding remarks, Dr Parvaiz Vazirian, Board Member , Friends of the Fund- South and West thanked the esteemed panelists for their address . He ended by saying that with partnership in the Region, much could be achieved.
The conference had a sessions on Challenging Endeavor: Diminish HIV/AIDS, TB and Malaria Burden addressed by Dr Bobby John, Global Health Advocates, Ms Elizabeth Selhore from SAHARA, Dr Parvaiz Vazirain , Iran and Lalith Ramanayake, JKH , Sri Lanka .The second session focused on Emerging Issues in Health in SWA Region : The Response , was addressed by Dr Dilip Mathai, Dr Islam Hamid (Pakistan ), Mr Wahaaj (Afganistan) ,\and Mr M N Neupane ( Nepal ). Top
Build solid banking before moving on CAC: ASSOCHAM- PwC
Delhi, March 11, 2010 India would need to work on sustaining its economic fundamentals over a period of time with a strong banking system before going ahead with the implementation of Capital Account Convertibility (CAC), says a joint study of The Associated Chambers of Commerce and Industry of India (ASSOCHAM) & Pricewaterhouse Coopers (PwC).
It points out that as recognized in the recent Tarapore Committee Report, the ability of financial institutions to identify, measure, and manage risk will also depend on the availability of instruments to manage risk, the liquidity of financial markets and the quality of market infrastructure, and level of market discipline.
However, key segments of the Indian capital markets remain underdeveloped. The term money market is limited and although there is a domestic yield curve for government securities with maturities up to 30 years, its depth and liquidity are limited. The corporate bond market is relatively small and illiquid, and the market for securitized assets has fallen short of expectations. The OTC derivatives market is growing rapidly but its prudential and regulatory framework has just been laid out.
Releasing its findings here today, the ASSOCHAM spokesman said “Regulators and market participants have been warning for years about the dangers of the unchecked growth of the credit default swap market and about the difficulty of assessing, who could be at risk for derivative market failures.
The study points out that in India, delinquencies in retail portfolios of banks have still not reached panic levels. Nonetheless, they are inching up slowly but surely. Add that to the sudden drying up of liquidity and the domestic mutual fund industry emerges as India’s weakest link in the securitisation food chain. The bigger fear is that that this exposure could have a cascading effect on the entire banking sector, with the risk getting transferred to many of the parent companies of these MFs. The dominance of mutual funds in securitisation coincided with private sector banks slipping into overdrive to hawk retail loans.
As regards, dangers with securitized products, the ASSOCHAM-PwC study points out that high-risk, high-return products originated by private sector banks, Non-banking Financial Companies (NBFC’s) and companies; the mutual funds that pick them up have no control over their credit quality, highly illiquid with no secondary market; Mutual funds have no option but to hold the ABS or MBS till maturity, not very transparent products; disclosures are on a monthly basis to rating agencies (in contrast to corporate debentures or bonds, in which information is always available about the company on a stock exchange on a daily basis).Globally, despite rating agencies rating them highly, a sudden chain of defaults in the underlying assets (mortgages) brought down the big institutions.
Innovative financial products have played a key role in the development of the current financial crisis, and have also compounded the difficulty of resolving it. This is because the difficulty of valuing such products has, in many cases, caused markets for them to cease functioning. This has led to great uncertainty regarding the financial position of institutions holding these products, which has, in turn, frozen the process of trying to separate “good assets” from “bad assets,” an important step in restoring the normal functioning of credit markets. Top
Infosys doubles investment in training: S Gopalakrishnan, Infosys
Delhi, March 10, 2010 The State Bank of India’s Chairman Mr O P Bhatt on bank’s HRD initiative on conscious capitalism said, “After a successful nationwide programme ‘Parivartan’ in which all 2 lakh employees of SBI were involved, employees had demanded repetition of such a programme at the organization. And as a part of which our unique programme of ‘Citizen SBI’ was launched. It has completed first phase and next three phases will be over in about two years.”
Mr Bhatt said this while delivering a keynote address, at the Conscious Capitalism summit organized by Confederation of Indian Industry (CII) and Conscious Capitalism Institute (CCI) in Mumbai today, on Large Scale Business Transformation: The ‘Citizen SBI’ Initiative.
He talked about the bank’s initiative which is a part of its Corporate Social Responsibility and aims to enhance employees’ self-awareness not only towards their work but in overall behavior and personality with inner sense.
The Information Technology (IT) sector in India has always focused on high quality delivery and hence could maintain the growth rate, said Mr S Gopalakrishnan, CEO & Managing Director of Infosys Technologies at the summit.
Mr Gopalakrishnan (Kris) while speaking on ‘Conscious Leaders – Conscious Business: Firms of Endearment in India’ at the summit said that after global economic downturn, the company is looking more at improving its manpower skills and would double the investment in training. “We have already increased the levels of training in last 12 months. That is what we have been doing since the global economic downturn. However, we have retained the growth of 30% to 35% with margins higher than the industry standards,” Mr Gopalakrishnan said.
This is because Infosys is a conscious business. He also added that the IT industry has changed the socio-economic environment as there are 2 million people employed in IT and they come from background in which about 40% of employees’ parents are not even Class 10 passed. “The total number of employed in IT and other industries in the periphery of IT is about 20 million,” he said.
Dr Shubhro Sen, Co-founder and Executive Director of the Conscious Capitalism Institute said that the institute is bringing unique innovations to leadership development in India. “We are developing the first ever conscious business management simulation game to help students and leaders to understand the implications and nuances of conscious business decisions in a compressed time frame.” This will greatly help leaders to see the differences in outcomes between “businesses as usual” versus businesses that practice conscious capitalism. In addition, ideas of conscious capitalism are deeply Indian and can be brought to other countries as they are contemporary and successful and can be found in traditional wisdom.”
Dr Raj Sisodia, Chairman of the Conscious Capitalism Institute and Professor at Bentley University said, “Effective practice of conscious capitalism is becoming essential as in a survey conducted in the US, there were hardly 2% people who said that they believed that the CEOs in general are ‘Very Trustworthy’. There is a need of building trust among entrepreneurs and society for sustainable development.” Top
Domestic technical textiles total value likely to be US$ 20 BLN: ASSOCHAM
Delhi, March 10, 2010 The total value of domestic technical textile industry is expected to be US$ 12 billion by 2012 from current estimate of less than US$ 10 billion which will further grow and touch US$ 19.76 billion levels by 2014-15 because of high demand factor, according to a Paper on Technical Textiles Market brought out by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).
One of the most important factor for this growth is of middle class population in India which now is estimated for about 300 million people. This factor has biggest impact of value of consumption of technical textiles in the sector of medical textiles.
Major driving applications are medical textiles, automotive textiles, geo textiles and hygienic products. According to forecast made in the Paper of ASSOCHAM, value of medical textile industry will be $ 600 million by 2012 since India is changing from developing country into developed country
Releasing its findings, ASSOCHAM President, Dr. Swati Piramal said that due to high demand growth potential, the technical textile market is estimated to grow at an average annual rate of over 10-12% in next 4-5 years.
According to ASSOCHAM estimates, India is likely to double its share from 4% in the global market for technical textile due to possessing of most of raw materials like jute ( the biggest world producer), silk (second world producer), cotton (third producer), cellulosic fiber (third producer), synthetic fiber (fifth producer), wool (11th world producer).
The consumption of technical textiles in the country is expected to grow from mani fold as its requirements are growing because such products are available at extremely competitive price due to technological upgradation.
Other factors influencing growth of technical textile products is due to increase in working women population which will fuel up demand of such products as income, willingness and availability of plastic money is increasing in India.
Consumers are changing and so is their lifestyle which will bring in boom in growth of organized retail market especially in technical textile segment. In addition, competition will create innovation and value for money items, large raw material base is available in India which is the second largest cotton producer and fifth largest producer in the world. In the projected global business of technical textiles, more than 50% share is that of Asia in which India’s role is quite dominant.
The ASSOCHAM Paper has recommended that Indian textile industry should have a multi-pronge strategy to ensure development of agro shade net fabrics, chemical protective fabrics and multi-layer sportswear fabrics. In addition, soft armor ballistic protective fiber, pavement overlay fabrics, woven geo-grid fabrics, airbag fabrics and special finishes for parachute fabric should be undertaken at war footing.
The Paper has recommended that since India will need a huge investments in the sector, therefore it needs to relax regulations, allowing for 100% foreign investments in technical textiles with low import duty for technical textiles machinery.
12 segment of technical textile would grow faster of which the most demanding would be geo-tech, buildtech, agro-tech and meditech, said Dr. Piramal. Top
Government to encourage Private Education Institutes : Kapil Sibal, HRD Minister
Delhi, March 09, 2010 The Government of India is proposing several legislative amendments in the higher education to encourage private participation in educational arena, said the Minister for Human Resource Development.
“There are three legislations we are planning to propose for improving higher education in the country including, one allowing domestic and foreign players to set up educational institutes, setting up National Accreditation Authority and for the Educational Finance Corporation,”
Mr Sibal said at the Conscious Capitalism Summit organized by Confederation of Indian Industry (CII) and Conscious Capitalism Institute (CCI).
Minister said that the government would reduce its intervention in the education. “The National Accreditation Authority would do all the evaluation process of the institutes as per their declarations made on their websites pertaining to the infrastructure, faculty members etc for the quality education,” he said.
The Ministry of HRD has also sent a proposal to the Planning Commission for setting up the Educational Finance Corporation. “This will reduce the fee structures in private institutes as they would be provided with long term commercial borrowings. Similarly, students would also be extended with the facility to fund their education and would not have to depend on their parents,” Mr Sibal said.
He emphasized on the role of private players in the higher education sector and said, “Only about 12% students enrolled in schools enter in the colleges for higher education who fall in the age-group of 18 to 24 years. We want to increase the resources for them and States alone cannot do it.”
Mr Sibal also pointed out that the satellite mapping could be used to curb the menace of encroachments and slum dwelling in the cities.
“During my tenure as the Minister for Science and Technology, we developed a system through satellite imaging and mapped entire Chandni Chowk area of Delhi. All small and big constructions were mapped in the systems and any new cropped up construction or encroachment would be caught by the system which was not mapped even on previous evening.
We are planning to employ this technology in other areas of the city and gradually other cities which could resolve illegal constructions and encroachments,” Mr Sibal said.
Dr Shubhro Sen, Co-founder and Executive Director of the Conscious Capitalism Institute speaking on the institute said that it is here to make a positive difference in India in the way our corporations are run and conduct themselves in the society. “We want India’s current and future leaders to be world class and be on the right side of society. The institute also wishes to help India recognize that these ideas and practices that are so contemporary and successful are timeless and rooted deeply in ancient Indian values,” he said. Dr Sen stated that Conscious Capitalism can become one of India’s most important exports to the rest of the world. “We can lead the way with values driven capitalism in the 21st century,” he said.
At the CII’s summit, Dr J J Irani, Past President of CII and Director of Tata Sons said, “Corporate Social Responsibility is not an expense but investment. JRD Tata in his first 3-4 years of entrepreneurship focused completely on the development of community around its business set ups and hence could create Jamshedpur.”
Dr Raj Sisodia, Chairman of the Conscious Capitalism Institute and Professor at the Bantley University explaining the need of such an institute said, “In a survey on trustworthiness of the entrepreneurs in USA, only 2% respondents believed that the CEO’s are ‘Very Trustworthy’. This shows that earning community’s trust would be pivotal for sustainable growth of organizations.” Top
On the Occasion of World Women’s Day - Statement made by Mr. Chandrajit Banerjee, DG, CII
Delhi, March 08, 2010 The quiet revolution of gender empowerment is transforming the social, cultural and business landscape of India. With 10 lakh women elected as people’s representatives, crores of women belonging to self-help groups, and rising participation of women in the workforce, women are rapidly scaling their presence in the Indian polity and economy. In years to come, the impact of this woman-power on India’s economic growth and inclusive development will be tremendous.
There are, however, still gender gaps to be filled. The corporate sector has a vital role to play as a catalyzing agent and CII intends to drive this agenda, said Mr Chandrajit Banerjee, Director General, CII. Top
Majority of India’s top CEOS express confidence of over 8% growth in 2010-11
Delhi, March 08, 2010 Following the Economic Survey projections of GDP growth at 8.5 % in 2010-11, a good majority of CEOs surveyed during the CII National Council Meeting held on 3 March 2010 in New Delhi showed confidence that India will grow between 8-8.5% in 2010-11. About 100 CEOs attended the CII National Council meeting. An overwhelming 92% of the CEOs predict a better outlook for the first quarter (Apr-Jun 2010) as compared to the current quarter (Jan-Mar 2010).
Over the last few days, the Finance Minister has been lauded for presenting a development-oriented Budget maintaining a finely balanced view of allocating increased outlays for priority sectors like Infrastructure and putting more money in the hands of the consumer through the restructuring of the tax slabs, while keeping efforts to reduce the fiscal deficit. Responding to the question on meeting industry expectations, 64% of the CEOs gave a thumbs-up to the Budget saying that it met their expectations.
Reducing the fiscal deficit to sustainable levels where it does not hinder growth and still is able to rein in inflation has been the tight-rope walk for the Finance Minister and wins the confidence of 64% of the respondents who believe that he would be able to achieve the target of reducing the fiscal deficit to 5.5% in 2010-11.
Close on the heels of the Annual Policy Review which will be released by RBI in April 2010, 60% of the respondents feel that that the best response by the RBI would be to maintain status quo on both CRR and Policy rate changes. This comes in the backdrop of RBI raising CRR by 75 basis points from 5.0% to 5.75%, and shifting its stance from ‘managing the crises’ to ‘managing the recovery’ in its Third Quarter Monetary Policy Review. A uniform view that emerged was that inflationary pressure is not expected to subside anytime soon, with 56% of the respondents maintaining that inflation would be in the range of 8.5-9% by end-March 2010. Top
Wipro Technologies Enters into a Strategic Partnership with The Main Street America Group
Bangalore, March 04, 2010 Wipro Technologies, the global IT services business of Wipro Limited (NYSE:WIT), today announced that it has entered into a seven year strategic agreement with The Main Street America Group, a leading provider of commercial, personal and surety insurance products exclusively, sold through independent agents to individuals, families and small businesses in 24 US states. Main Street will engage with Wipro for applications development, maintenance and quality assurance using Wipro's CMMi Level 5 quality services.
Under terms of the agreement, Wipro will supplement Main Street America's IT organization in its endeavor to support its present and future business needs. Main Street America will leverage Wipro's global delivery model to achieve faster time-to-market capabilities and reduce operating costs by utilizing economies of scale. Wipro will support Main Street America's Personal Lines business on its Main Street Station and legacy platforms. In addition, Wipro will support its Main Street Station Commercial Lines and Bond processing systems. Under the agreement, Wipro will bring Service Level improvements over the initial term of seven years.
"As The Main Street America Group continues to increase scale and productivity, we need to implement more efficient processes while reducing our operating costs," said Ronald James, Main Street America's chief information officer. "Because Wipro has more than 4,500 IT insurance professionals at its disposal, we will be able to better support specific phases of projects and maintenance/regulatory demands from our business units. Partnering with Wipro could also help us close timelines and accelerate delivery of some of our projects."
"Wipro's demonstrated capabilities to US insurers allowed us to become Main Street America's trusted IT Services provider. We look forward to supporting their future growth," said Ajoy Menon, Insurance Business unit Global Head, Wipro Technologies. "Main Street America has a strong customer service culture with its distribution force of independent insurance agents and employees. We are happy to partner with them as we are confident with our expertise and customer-oriented approach we will be able to deliver greater value and enable Main Street America to sustain its superior customer service culture." Top
India Needs Innovation Ecosystem
Delhi, March 03, 2010 In his welcome remarks delivered at “Unconference on Building India Innovation Ecosystem” at New Delhi today, Mr. Ajai Chowdhry, Chairman-CII National Committee on Technology & Innovation and Chairman & CEO,HCL Infosystems Ltd. mentioned that technology and innovation is critical to inclusive and India needs a unique ecosystem for constant sustainable growth.
An “Unconferncing on Building India Innovation Ecosystem” was held with the support of Planning Commission. The main idea behind the unconference was to discuss on creating an India focused Innovation Ecosystem by identifying the existing enablers, inferring the gaps and identifying specific goals to address key challenges of our country where innovation can play a major role. Mr Arun Maira, Member - Planning Commission was the moderator of the event and gave an overview about the entire concept. Mr. Sam Pitroda advisor to the Prime Minister of India on Infrastructure & Information called for an innovation culture that promotes breaking of processes. Prof. Samir K Brahmachari, Secretary - DSIR, and DG-CSIR shared his valuable thoughts on the above theme.
Prof. Rishikesha Krishnan, IIM Bangalore was the rapporteur and gave interesting visual representation of the overview of the existing Innovation ecosystems & gaps. The interaction concluded with the feedback from the participants and consolidation by the moderator. The effort of CII was lauded in organizing such a dynamic exciting event where participants could voice theirs ideas and opinion on their take on Innovation Ecosystem.
All participants agreed that more similar interactive sessions will help in achieving the desired innovative ecosystem that our strongly needs. Top
Industrial Technology and Innovation Mission launched
Delhi, March 03, 2010 In order to make India a global hub of excellence in cross disciplinary higher education of as well as in Industrial R&D in the 21st century through Industry-Academia collaborations, CII and all IITs have formed CII-IIT Council today.
Directors of 13 IITs and key industry captains of CII National Council are the members of this newly constituted council.
In the first meeting of the Council, three very important initiatives have been launched. The first initiative is to come out with a yearly compendium of IIT-Industry successful collaborative projects and celebrate the same in a yearly convention to provide necessary recognition and rewards to inspire others.
The second initiative that was launched was Industrial Technology & Innovation Mission for design and development of new products and solutions. This mission will involve creation of a pool of willing industry (with a special emphasis on MSMEs) who will invest in product development, future technologies, technologies to overcome national and global challenges.
The council has also decided to develop a roadmap for 21st Century Innovation University being contemplated by the Government of India.
Mr. Ajai Chowdhry, Chairman-CII National Committee on Technology and innovation and Chairman & CEO,HCL Infosystems Ltd. Chaired the first meeting of the council.
All the members felt that this initiative will provide necessary thrust for India to leapfrog towards innovation driven Economy. Top
No roll back on excise, customs for petro products, MAT will also stay : Revenue Secy
Delhi, March 03, 2010 Despite pressures for rolling back excise and customs increase on petroleum products, the government is unlikely to shake and rates announced for excise and customs for petroleum products including 18% MAT in Budget proposals for 2010-11 will stay as such, indicated Revenue Secretary, Mr. Sunil Mitra.
Delivering his keynote address at ASSOCHAM organized Post Budget Seminar here today in which Chairman CBEC Mr. V Sridhar and Chairman CBDT, Mr. S S N Moorthy had also participated, Mr. Mitra clarified that effective corporate tax is around 22% and Finance Minister rewarded common man and industry with lot of consumption as well as savings power, no roll back could be possible on issues listed above.
Fiscal consolidation and growth would continue to be top priority of the Finance Minister for which revenue generation is one of the objectives of the Finance Ministry and through raise in excise and customs on petroleum products including crude, the government would have to generate Rs.26,000 crore in fiscal 2010-11, pointed out the Revenue Secretary. This will be possible only with no tinkering in excise and customs duties proposal announced for petroleum sector for Budget 2010-11, said Mr. Mitra.
He explained that hike in excise and customs duties would not fuel inflation in the long run and on the contrary the raise in these two duties would be absorbed because food inflation is mainly on account of supply side constraints. Mr. Mitra, however, admitted that inflation could marginally go up in the short term on account of upwardly increase in customs and excise.
Referring to the issue of MAT, the Revenue Secretary pointed out that the government not only relaxed surcharge on corporate tax but also substantially raise income-tax rebate for common man, the impact of which would be that consumers would have greater purchasing power and would be able to save also.
Therefore, 3% raise in Minimum Alternate Tax should be taken by the industry in right spirits as it would marginally increase their tax burden, said Mr. Mitra calling upon industry not to seek it’s reduction and on the contrary helped the government move on the path of higher growth trajectory as well as ensure for it prudent fiscal consolidation policies.
In his remarks, CBDT Chairman, Mr. S S N Morthy disclosed that until recently the Finance Ministry disbursed worth Rs.42,000 crores of income-tax refunds to eligible taxpayers in ongoing fiscal as against refund benefits of Rs.28,000 crore for entire preceding fiscal. He assured that it would further expedite the process for faster clearances of refund dues in future by creating a Special Monitoring Cell in the CBDT to avoid public criticism.
He further said more than 50% hike has been noticed in the refund benefits to taxpayers until today for fiscal 2009-10 and it would be the attempt of the Finance Ministry to clear off eligible refunds as soon as possible so that there is hardly any public criticism.
According to Mr. Moorthy, the Central Board of Direct Taxes as suggested by ASSOCHAM would create a special Monitoring Cell in the board so that refund benefits are not delayed and tax compliance increase as per Budget estimates for 2010-11 for an amount of Rs.4,30,000 crore.
In his welcome remarks, ASSOCHAM Vice President & Member of Parliament, Mr. Rajkumar Dhoot urged the government to reconsider increase in Minimum Alternate Tax to a ceiling of 18% and urged the government to bring it down 15% since industry was anticipating that MAT would be reduced to levels of 10%. He complimented the Finance Ministry for presenting a balanced budget which would integrate a sound balance between growth on one side and consumption and savings on the other.
Speaking on the occasion, ASSOCHAM Committee Chairman on Indirect Tax, Mr. Nihal Kothari urged the government to exempt real estate sector from levy of service tax since real estate is subjected to stamp duties and therefore it faces the challenge of double taxation.
Mr. Rahul Garg, ASSOCHAM Committees on Indirect Tax Co-Chairman sought norms for reporting of agriculture income which was endorsed by Mr. D S Rawat, Secretary General ASSOCHAM who also spoke on the occasion. Top
Fire Fighting Enterprises Appoints Vishwajeet Thakar as India Manager
Mumbai, March 03, 2010 Fire Fighting Enterprises (FFE) has appointed Vishwajeet Thakar as its new India Manager. A subsidiary of Halma p.l.c., FFE is the world's largest independent manufacturer of infrared optical beam smoke detectors. The company is committed to developing the Indian fire safety market and has already had many successes in installations across the country, from cinemas to power stations. Vishwajeet's appointment will help to secure the company's reputation in India.
Based at Halma's Mumbai hub office, Vishwajeet will work to increase awareness of FFE's beam detectors and vibration switches across India. He will cement relationships with existing customers while also working to identify new customers and market opportunities. By gaining an understanding of end-user requirements he will be able to provide valuable input into developing new products based on the needs of the Indian market.
Vishwajeet has over 15 years' experience in technical sales, most recently as a product manager with System Application International, a UAE-based diversified engineering group. Prior to that he held business development management positions with a number of leading international and Indian companies, including Digihome Solutions and Schneider Electric. He holds a Masters Degree in Management Science, a Diploma in Business Management and a BSc in Science, all from the University of Pune. Top
Exports growth will need to accelerate to 18-20% for the next 15 years
Delhi, March 02, 2010 Indian manufacturing has seen an impressive annual growth rate of around 6.8 percent over the last 10 years (1999-2009) making India one of the best performing manufacturing economies in the world. Manufacturing contributes ~15 percent of India’s GDP, ~50 percent of exports and ~12 percent of the workforce and has a multiplier effect in generating indirect employment. It is in this context, that the CII - BCG Report on Indian manufacturing addresses some key questions - What should be the growth aspirations of the manufacturing sector in the country given that India needs to generate nearly 220 million new jobs in next 15 years? How can India enhance competitiveness of its manufacturing sector? What are the impediments to achieving this aspiration? This CII – BCG report examines these questions, in the context of the major forces that are shaping global and Indian manufacturing industries.
To meet these challenges, the report sets out an aspirational, growth rate of about 11% p.a. over the next 15 years which will make India the fourth largest manufacturing economy in the world by 2025 (current ranking of 13th) and generate between 50-90 mn additional jobs by 2025.
The aspirations have several critical implications. Gross fixed assets will need to increase by Rs. 55 - 80 lakh crores by 2025. Exports growth will need to accelerate to 18-20% from the 11% seen in the last decade. India’s labour productivity will need to increase substantially and close the growing gap with China. Finally, India will have to produce many more ‘world beaters’ from the manufacturing sector with 3-4 fold increase in the number of Indian manufacturing companies with annual revenue in excess of $1 billion from 25 today to 70 - 80 in 2025, and 4-5 firms with annual revenue in excess of $100 billion.
To achieve this aspiration, the report proposes a “House of Manufacturing” as a roadmap with three key pillars:
Developing Strong Enabling Infrastructure: Manufacturing sector cannot achieve its aspirations if India does not build a strong enabling infrastructure. The report outlines the three important components of this enabling infrastructure and the challenges in each (1) world class physical infrastructure that drives higher efficiency, with focus on better execution of infrastructure projects (2) strong human capital to ensure that manufacturing companies have access to high quality talent, specifically increasing focus on ‘employabiliy’ of the educated workforce beyond just an increase in number of qualified personnel and (3) simplified government procedures and policies and reduction of transaction costs and indirect taxes that will improve the ‘ease of doing business’
Exploring New Avenues of Growth : To achieve this level of growth, the Indian manufacturing sector will have to go beyond ‘business as usual’ and exploit new avenues for growth that are being created today. The report identifies and discuses three such high growth opportunities (1) rapid globalisation of supply chains and migration of manufacturing capacity to developing countries, opening up a large export opportunity (2) sustainable development and emergence of “Green Technologies”, creating opportunities in green products and services, as well as opportunities and threats from carbon costs and (3) India’s changing income demographics and opportunities among the “Next Billion” consumers segment, a global market of ~ $ 950 Bn where Indian companies can have a natural advantage since a substantial part of this segment is in India
Driving Higher Productivity and Competitiveness: Productivity is a key driver of cost competitiveness. Given increased volatility in factor costs, shifting demand patterns and a more aware and educated labour force, Indian manufacturing will require a new wave of productivity improvement. The report identifies and describes three powerful levers of productivity enhancement (1) exploiting the power of clusters, which drive more competitive economics because of increased supply chain responsiveness, decreased time-to-market, superior access to talent, and lower logistics costs (2) leadership in innovation and new technologies, through higher R&D spend and effectiveness, and especially leveraging India’s traditional areas of strength such as IT and software and (3) More flexible manufacturing and lean 2.0 practices to drive down costs and improve productivity through a strong shared aspiration, engagement model and capability building across levels and an underlying cultural transformation.
Government policy has played and needs to continue to play a crucial role in achieving India’s manufacturing aspirations. In the report, four policy themes have been identified and discussed: (i) Focus on Export-led Growth - India has a lower share of global manufacturing trade than many other RDEs and manufacturing exports are a smaller share of its GDP. Should India change its current policy framework and become much more aggressive in promoting export led-growth of the manufacturing sector? (ii) Balancing scale and depth across industries - While India’s manufacturing has grown its scale driven by the growth of consumer demand in many sectors, it has not built desired ‘depth’ of value addition and capability in several critical industries. Depth is important for multiple reasons – retaining control over critical industries, capturing greater share of value along the chain and reducing vulnerability to global shocks. Should Government policy focus more on building ‘depth’ in Indian manufacturing going forward? (iii) Labour Policy for Manufacturing Industry - India has strong labour laws protecting worker rights. However, these same rights are seen to constrain the growth of large scale manufacturing and also introduce rigidity in the labour market. If India has to achieve its growth aspirations, it is critical the policy interventions be made in labour laws be revised to facilitate higher scale, productivity and flexibility while protecting worker rights. (iv) Driving the right 'industrial structure' for India - India is a large country, with dispersed population and large number of stakeholders. It faces many issues in developing its industrial infrastructure ranging from acquisition of land to growing aspirations of the local population to have a share in the benefits development. What should be the right industrial structure for India going forward that balances the benefits of building large scale operations with many advantages of having small scale and dispersed entrepreneurial businesses that give greater stake to local population?
Indian manufacturing has the potential to be the driving force in India’s economic development over the next two decades. Success, however, will require strong commitment, careful planning and willingness to make bold moves on part of both the Government and industry to break the constraints and exploit the opportunities. The report lays out a comprehensive roadmap to achieve the ambitious aspirations it sets out for the country. Top
