Transcript Membership Department 2009-10

CII’s Agenda – 2010-11
and beyond……
1
© Confederation of Indian Industry
CII Estimates GDP Growth at 8.0 – 8.5% in 2010-11
• India has weathered the global economic crisis better than other countries – EIU.
• India considered an emerging economic superpower and part of G20.
2008-09
2009-10
2010-11 E
Agriculture
1.6
-0.2
2.0 – 3.5
Industry
3.9
8.2
8.5 – 9.0
Services
9.8
8.7
9.3 – 9.5
GDP
6.7
7.2
8.0 – 8.5
• Rainfall during 2009 was significantly deficient at 23% led to decline in
agricultural production
• A recovery in agriculture likely in the coming year leading to upside in GDP
growth; Industry and services to remain strong as capacity expansions take place
to take advantage of rising demand
2
Source: CSO, CII Research
© Confederation of Indian Industry
India’s economic outlook remains very robust…
GDP expected to grow at
~ 8% to reach ~$2T by 2016
India projected to be #3 largest
economy by 2050
India real GDP (at 2009 prices) *
“India has the potential
2050 GDP
$2T
$1.8T
$50T
44
40
2
$1.2T
to grow fastest over the
next 30-50 yrs…if
development proceeds
successfully”
35
28
30
1
20
8%
CAGR
1
0
3
10
2009
2015
(estimate)
Calendar year; Exchange rate: INR50= USD1
Source: Euromonitor; EIU; Goldman Sachs
(BRIC report)
0
Current
rank
© Confederation of Indian Industry
China
US
India
3
1
10
However we face Significant Challenges
• Global developments: Developments in EU-Greece highlight the fact
that global conditions will remain volatile for some time; excessive
dependence on foreign capital inflows is not recommended for India
• Exchange rate: Currency fluctuations being driven by external
conditions will have an impact on the real sector; important role for
RBI in preventing excessive volatility
• Trade prospects: Improving with stabilisation in the global economy
but growth in developed economies will remain weak in the near
term; need to diversify markets
• Inflation: urgent need to get inflation under control; monetary policy
cannot be the only instrument when the drivers food, fuel and
commodities.
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However we face many significant challenges
Future
Current
• High Poverty rates:
- Unacceptable poverty (37%1)
- 456M2 people live on <$1.25/day
• Low literacy rates
~70% of population- among the
lowest in the emerging
markets*
• Corruption & red-tapism
Ranked #84 out of 180
countries on corruption index
1
• Widening “job gap” in next 5
years:
17M job gap~94M new people will seek
jobs but only 77M new jobs
will be created
Source: (% of total population) Expert Group on Methodology for Estimation of Poverty - chaired by Prof. Suresh D. Tendulkar, 2010
2
2005 PPP adjusted figure based on “World Bank poverty estimate for developing world” (2008);
*China and Brazil >90% (% of pop. aged 15+)- Euromonitor
^ Transparency International- India scored 3.4/10 where highest was 9.4 (New Zealand)
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© Confederation of Indian Industry
Two biggest sources of employment in our economy are
agriculture & private sector
Employment by location & sector (M); FY 2007
100%
80
402
402
201
Urban
(29%)
Others
Construction
Services
Public
Manufacturing
60
40
20
Trade, hotel,
restaurant
Rural
(71%)
Private
Agriculture
0
Note: *Excludes unorganized workers in the organized sector; ^consists of those in the working age group (15-59) actively seeking employment;
1
2
includes community, social and personal services; includes mining and quarrying; transport, storage and communication; finance, insurance, real estate; electricity , water etc
Source: Registrar General of India; NSSO; Indiastat; Labour Bureau of India
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© Confederation of Indian Industry
Going forward, the private sector will need to be the
primary driver of creating new jobs
Expected increase in number of jobs
by sector (M); FY 2007-12
120
125
100
75
Finance, insurance, real
estate and business services,
Transport, storage and
communication
Mining & quarrying
58
Elec. gas & water supply
Construction
50
Community,
services
25
social
and personal
Manufacturing
0
-25
Trade, hotel, restaurant
-4
FY 2007-12
Agriculture
FY 2007- 17
Private sector growth needs to increase from projected 9.5% growth to ~12%+
annually to close job gap
*
Note: Excludes unorganized workers in the organized sector; ^consists of those in the working age group (15-59) actively seeking employment; includes community, social and personal
^
services; includes mining and quarrying; transport, storage and communication; finance, insurance, real estate; electricity , water etc
Source: Registrar General of India; NSSO; Indiastat; Labour Bureau of India
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© Confederation of Indian Industry
Four key enablers for faster sustainable growth – over
the medium term
1
Qualified talent
pool
Education
2
Employability
Sustainable enterprise
3
Create jobs & livelihoods
Innovation
4
Entrepreneur-ship
Effective business
practices
CII Theme 2010-11: Business for livelihood
8
“Businesses are part of civil society”
“Creating jobs is the best CSR activity”
© Confederation of Indian Industry
How do we achieve this vision?
We need to aim for sustained 10% GDP growth
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© Confederation of Indian Industry
Vision 2010-11
Business for livelihood
(Education & Employability, Innovation & Entrepreneurship)
Social and Corporate
imperatives
Agriculture
1
0
Manufacturing
Services
Infrastructure
• Art, sports & literature
• Education & skills
• Healthcare
• Corporate governance
• Inclusive society & affirmative action
• Entrepreneurship, innovation &
competitiveness
• Economic policy, reforms, governance &
implementation
• Energy, water & climate change
• Urbanization & future cities
© Confederation of Indian Industry
• Trade & globalization
Ten Point Agenda for 10% Growth
1.
Agriculture needs to grow at a sustained rate of 4%
2.
Manufacturing needs to register 11-12% long term average growth
3.
Service sector needs to remain robust and a growth driver
4.
Physical Infrastructure needs to be of global standards
5.
Education would have to be the centre of reforms
6.
Skill development would need a massive step up
7.
Labour environment and rules need to be conducive to employment creation
8.
Delivery mechanisms of Government need to be streamlined
9.
Need New Urban Centres to come up as growth poles
10.
The financial sector reforms need to be fast tracked to enable financing of a high
growth, large economy – particularly focusing on long term funding instruments
and Financial Inclusion
Aim is to Achieve a Sustainable and Inclusive 10% Growth by 2014
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© Confederation of Indian Industry
1. Achieving 4% Sustained Agriculture Growth
Virtual stagnation in Agriculture due to
• Poor infrastructure
• Collapse of Agricultural Extension System
• Decline in public investment in agriculture/ irrigation
• Fragmentation of land holdings
To do:
• Raise farm productivity by improving quality of inputs
• Better Supply Chain Management
• Improving Market linkages
• Optimal and Sustainable use of available land
• Right Pricing of Power and Water
CII initiatives
•Special Task Forces constituted to address issues related to agriculture
•Special Task Force on Monsoons
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© Confederation of Indian Industry
2. Achieving 11-12% Long Term Manufacturing Growth
•
•
•
•
•
Need an Enabling Manufacturing Policy to include
– Simpler clearances and approval mechanism
– Encouragement to Green Manufacturing Technologies
– Appropriate Infrastructure
– Flexible labour rules without diluting social security
net
– Easier exit policy
Friendly tax system – GST and a well considered DTC
FTAs and CECA/CEPAs to be entered into with care and
consideration
Government support needed for Technology infusion,
development and upgradation in select sectors
Land Acquisition and R&R Laws to be in keeping with
requirement of industrialization
Proposed NMIZ
Policy addresses
these issues,
therefore, needs
quick enactment
•
Every additional 1% growth
in manufacturing creates
20-30 million additional
jobs
•
Need to develop strengths
in labour-intensive sectors
such as textiles, consumer
electronics, furniture and
industrial machinery
• CII working with DIPP on New Manufacturing Policy
• 2010-11 would see a huge thrust to the Cluster programme of CII
• CII would release a white paper on Land Acquisition and R&R
• CII would set up a VLFM Institute
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© Confederation of Indian Industry
3. Taking Services to the Next Level
Key policy changes required in services sector include
‾ Enhanced FDI participation in select areas of services
‾ Set up a National Services Competitiveness Council
‾ Iron out Centre-state issues in the services sector
‾ Improve the viability of the informal sector in services
‾ Rationalise taxation issues in the sector
•
CII Initiatives in the services sector include
– Developing PPP model in healthcare space with Planning Commission
– Policy dialogue with Planning Commission for a comprehensive retail policy
– Dialogue with the Ministry of Tourism for upgrading skills of the manpower
required in the Tourism & Hospitality Sector for the Commonwealth games.
– CII to facilitate Policy dialogues on Roadmap for accelerating growth of
broadband in India to reach 695 million users by 2014
– Facilitating policy dialogues for Broadcast Regulation and Distribution platforms
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© Confederation of Indian Industry
4. Creating world class infrastructure
•
Roads and highways: Improve dispute resolution mechanism for road
development
•
Power sector: Push distribution reforms in the power sector through
privatisation of large discoms, reduction in AT&C losses and peak load
management
•
Civil Aviation: Timely policy intervention for settling the issues regarding
airport infrastructure; provision of space for establishment of MRO facilities;
and, rationalization of high sales tax on ATF
•
Ports & Shipping: Corporatise major ports and improve port evacuation
facilities for improving port connectivity
• A CII-MoRTH Joint Task Force created to identify issues of concern in the roads
sector and suggest solutions
• CII National Committee on Civil Aviation consulting with Airports Economic
Regulatory Authority
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© Confederation of Indian Industry
Education (primary and secondary) delivery system needs
significant improvement
High drop out rates throughout schooling
100%
100
80
-26
60
-24
40
20
0
Initial
enrolment
Class
I-V
Class
VI-VII
38
-12
Class
IX-X
High
school
Poor quality of delivery – stagnation/decline in learning & comprehension
• Teacher to student ratio of 1:60 at primary level
• Only half of 5th standard students can read 2nd standard text in 2008
• Only 28% across grades could do simple division sums in 2008
Source: Annual report, Department of School Education & Literacy; Forbes India Budget 2010 analysis; Annual Status of Education Report (Rural) 2008
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© Confederation of Indian Industry
Education (tertiary): Gross enrolment rates are very low
vs. other countries
GER in tertiary institutions is considerably lesser than other countries
Gross enrolment ratio in tertiary education (2007)
100%
80
82
76
59
60
40
30
20
0
USA
Norway
UK
Brazil
23
China
12
India
(2006)
Govt of India aspires to achieve 30% enrolment in tertiary education by 2020
Gross Enrolment Ratio= (number of students enrolled in a level of education regardless of age)/ (population of official school age for that level)
Source: UIS data center; UNESCO Institute for Statistics; Department of Higher Education; Lit search
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© Confederation of Indian Industry
5. Education – The Big Agenda
Objective
To create the intellectual infrastructure and knowledge workers needed to sustain
high growth trajectory in a competitive global environment
CII Policy Initiatives
- Policy Advocacy to make teaching an attractive professional proposition by
addressing remuneration issues. Retaining talent in the teaching profession
- Developing practical modules to encourage private investment in the education
sector
- Support for foreign universities coming to India (Foreign Educational Institution-Entry
and Regulation Bill 2010)
- Public-Private-Partnership in developing industry oriented curriculum and
developing industry role in accreditation and rating of institutions
CII, in partnership with GoI will establish 30 Industry-Academia Innovation Centres
across the country – one in each state
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© Confederation of Indian Industry
Improving employability is an urgent need
…leads to an employability crisis
Inadequate vocational training…
Proportion of vocationally
trained labour force (Aged 20-24 yrs)
100%
80
68
75
78
96
80
• ~53% of employed youth suffer from skill
deprivation1
• Barely 10-15% non-engineering graduates are
employable1
60
40
• Only ~25% engineering graduates1
considered directly employable; e.g., Infosys’
annual training budget is ~Rs 750 Cr2
28
20
5
0
India
UK
Mexico
Canada
Korea
Germany Japan
Source: International Labor Organization; World Bank – Human Development Report, 2006; CLSA, March 2008; Credit Suisse, December 2007; 11th plan document; Planning Commission - task force on
employment opportunities, 2001
1 India Labour Report 2007 (http://www.teamlease.com/images/news_image/coverage2009/dec09/Addressing_22dec09_All.jpg)
2 http://www.bpowatchindia.com/bpo_news/infosys_spends_rs750_crore_on_training_workforce/august-11-2008/infosys_spends_rs750_crore_on_training_workforce.html
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© Confederation of Indian Industry
6. Stepping up Skill Development
Objective
To make India the skills capital of the world. Develop the skills needed to support the
rapid expansion of manufacturing and services, and develop a more productive and
sophisticated agriculture sector
CII Policy Initiatives
-
-
CII is working with Universities to develop vocational training centers. There is already
a CII-Delhi University Vocational training program
Setting up of new skills centres : Gurgaon with ITE Singapore and Balasore with
IndiaCan
CII has build sector specific Skills Councils for Agriculture , Hospitality, and Automobile
in partnership with the EU. Other such councils are on the anvil
CII is partnering with Ministry of Rural Development to develop vocational training in
rural areas based on local demand for skills and provide placement services for the
trained workers
Launch of 10 new CII Skill Development Centres
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© Confederation of Indian Industry
7. Conducive Labour Policy to Create Employment
Objective
To bring together industry, governments, and labor rights groups and create a policy
environment that supports employment generation, inclusiveness and productivity
enhancement. To develop best practices in labor management and standards that meets
global benchmarks
CII Policy Initiatives
- CII is working closely with government for the simplification and rationalization of labor laws
- CII is developing best practices and practical modules for contract labor keeping in mind the
objectives of livelihood sustainability
- CII is working with industry and other stakeholders on occupational safety and is an active
participant in the National Safety Council
- CII is closely involved in the policy formulation process with the Central Apprenticeship
Council and the Central Board for Workers Education
CII to release White Paper on Labour Regulations
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© Confederation of Indian Industry
8. Improving Government Delivery Systems
•
•
•
•
•
•
Quick implementation of Unique Identification Scheme
Move to a system of cash transfers or coupons compared to present system
of subsidy in specific items
Significant improvement possible in case of targeting food subsidies by
moving to food coupons that can be redeemed against food supplies in any
retail outlet
Greater devolution of power to local governance bodies such as Panchayats
in rural areas and municipalities in urban areas
Willingness of government bodies to work with private sector for ensuring
better delivery: PPPs in education and health services are promising
Set up regular monitoring/ assessment system using special groups
comprising experts, government officials and industry, in areas where large
outlays are made by government
CII Task Force on Technology for Inclusive Development
CII-State Government Monitoring and Implementation Task Forces
National Sectoral Task Forces (Government / CII) on monitoring and implementation
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© Confederation of Indian Industry
9. New Urban Centres as Growth Poles
•
•
•
•
•
•
•
Structural challenges driven by nature of urbanization in India i.e. unprecedented
scale, high density cities and predominantly Brownfield
Policy limitations – private participation and Urban Local Bodies functioning with
poor execution capabilities
Administrative problems – Municipalities are overburdened resulting in poor levels of
service delivery
To overcome these problems, need to give increased power to ULBs through ensuring
their financial independence and viability
Need to implement 74th Constitutional amendment
Enhance execution capabilities by devolution of operational and financial power to
local bodies
Encourage PPPs to create ‘Enabling Environment’ at State Level
• CII to facilitate dialogue on Real Estate Regulation Bill
• CII report on “Intelligent Urbanisation – A Roadmap for India” throws light on how
technology has a role in meeting India’s urbanisation goals
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© Confederation of Indian Industry
10. Financing High Growth
• Develop Rupee denominated corporate debt market for raising
long-term capital
• Increase access to international debt markets
• Expansion in capital base of banking system
• Greater FDI needed in Insurance and Banking
• Resources currently locked up in financing government debt needs
to be freed
CII is creating New Task Forces on:
-Financial Stability & Development; and
-Financial Inclusion
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© Confederation of Indian Industry
Small /micro entrepreneurs account for ~50% of jobs, but
multiple issues hamper growth
Self/small scale employment accounts for
large portion of workforce
80
40
20
Agriculture
60
0
Total employed
201
201
Public
By type
Private
>10
Private<10
402
Self employed
100%
Regular / casual
workers
People employed
(FY07)
Multiple issues to consider
• Little or no education, and no vocational
training
• Access to credit
• Lack of social security
• Self-employment for minority communities
(inclusive growth)
• Corruption, especially at grassroots
By ownership
Non-agri employed
Note: Self employed people may or may not be “entrepreneurs”, and may or may not be skilled
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© Confederation of Indian Industry
Innovation

Need to develop India specific Innovation Ecosystem Model for meeting challenges
unique to India’s context

A Public funded – privately managed endowment needs to be created, which would
address the early stage finance requirement of innovation

Favourable Policies and Incentives to increase Industry’s investment in Innovation
(R&D/Design/IPR) from current level of 0.2% of GDP to 1% of GDP in next five years
through Industry-Academia/R&D institutions-Government Partnership
CII, in partnership with Ministry of Science and Technology, will establish “Global Innovation and
Technology Alliance (GITA)” to implement Government’s Technology and Innovation Initiatives –
national and international
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© Confederation of Indian Industry
Inclusiveness and Affirmative Action

Indian Industry shares the nation’s resolve to address the deprivation
suffered by the SC/ST communities and commits to stepping up its
Affirmative Action agenda in the years to come to ensure that India
becomes a land of equal opportunity

CII has developed a voluntary Code of Conduct for members to implement
positive discrimination

CII would take the success stories among its members in the area of
affirmative action across the country to encourage similar initiatives in
other firms.
CII has created a Affirmative Action Fund with industry contributions to finance
affirmative action activities in the private sector
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© Confederation of Indian Industry
Corporate Governance
Key Issues
•
•
Inadequate number of qualified / competent independent directors
Unutilized whistle blowing mechanisms
Focus Areas for CII
•
•
•
Directors Training & Orientation
Directors’ Liability Issues
Effective whistle blowing methods
Proactive advocacy for adoption of CII Voluntary Recommendations on
Corporate Governance
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© Confederation of Indian Industry
Trade and Globalization
CII Goals

Double India’s goods and services exports by 2014 from current levels, double India’s
share in world exports by 2020

Substantially expand industry linkages in global production chain and access global
market through strategic acquisitions and joint ventures abroad
CII Policy

Develop a dedicated commercial intelligence mechanism for Indian industry

Focus on capacity building on quality accreditation, export cycle management and
logistics to make Indian industry more competitive

Engage with government to ensure trade agreements have positive outcomes for industry
and are equipped to deal with industry concerns on emerging trade issues like non-tariff
barriers, labor and environmental standards

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Focus on sector specific export competitiveness strategies
© Confederation of Indian Industry
Global Engagement
• 30 Overseas Business Delegations to key countries (China, Japan, S
Korea, UK, USA, Germany, France)
• 15 Planned meetings with Heads of State (South Africa, Russia, France,
UK, Japan, S Korea, Canada)
• CEOs Forums with countries of strategic interest (14 new Countries
identified – focus on emerging economies)
• Regional Conclaves in emerging markets of LAC, Africa, CIS
• Strategic dialogues – Track – II with China
• Business Summits – ASEAN, EU, IBSA, Pakistan
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© Confederation of Indian Industry
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© Confederation of Indian Industry