cii agenda 2015-16
TRANSCRIPT
© Confederation of Indian Industry
Recent reforms initiated by the government
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Since coming into power in May 2014, the new government has adopted several measures to reinvigorate investor interest and generate positive sentiment about the Indian economy
Categorization of reforms
More openness to Foreign
Investments
Easing the regulatory
environment for doing business
Non-adversarial and investor friendly Tax
system
Better Allocation of Natural Resources
Economic & fiscal
management
Foreign trade
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FDI limit in the defenceand insurance were enhanced to 49%
100% FDI was allowed in railway infrastructure and
medical devices sector.
Real estate benefitted from easing FDI norms in the construction sector
Allowed innovative financing Instruments REIT’s and InvIT’s for
financing real estate and infrastructure
Recent reforms initiated by the government More openness to foreign investments
© Confederation of Indian Industry 5
Launch of E-biz portal, IT based single window platform
integrating 14 government services at one source
Launch of web portal for online filing and monitoring of environment and forest clearance to ensure clearance in time
bound and transparent manner
Amendments to labour laws have also been initiated. Launched Shram Suvidha Portal for filing self-certified, single online return by industry for 16 central labour
laws
Introduction of computerized system of
inspections to reduce harassment
Constitution of an Expert Committee to Examine the possibility of replacing multiple prior permissions with pre-existing regulatory
mechanism
Recent reforms initiated by the government Easing the regulatory environment for doing business
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Government assures to undertake Retrospective amendments to tax laws with extreme caution
Introduction of a “Roll Back” provision in the APA scheme
Introduction of range concept for determination of arm’s length price on transfer pricing regulations
Set up of a high level committee to interact with industry on regular basis and ascertain areas where clarity is required
Deferring GAAR by another 2 years
Recent reforms initiated by the government Non-adversarial and investor friendly Tax system
© Confederation of Indian Industry 7
E-auction of coal blocks to private companies and
allotment of mines are currently under
process.
The MMDR Amendment Act has been passed making
auctions the sole method for granting mineral concessions and mining leases
Approval for innovative
mechanism( gas pooling ) for utilization of
stranded gas based generation capacity
Approval of new gas pricing formula and
guidelines
Recent reforms initiated by the government Better Allocation of Natural Resources
© Confederation of Indian Industry 8
Roadmap for achieving FRBM targets for achieving the fiscal deficit of 3 % over the next three years
Set up Expenditure Reforms Commission in order to contain wasteful expenditure of the government in a
systematic manner every year
Diesel Price Deregulation to Phase out of subsidies for fuels
Use of JAM- trinity Jan Dhan Yojana, Aadhaar and Mobile numbers to offer subsidy support to poor households in a targeted and less distortive way.
Recent reforms initiated by the government Economic & fiscal management
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A comprehensive five-year (FY16-20) export strategy, aims to nearly double the country's goods and services exports to
$900 billion by 2019-2020,
Focusses on supporting services and exports,
trade facilitation along with improving the
ease of doing business.
Takes steps for simplifying the system of rewards or incentives for exporters.
Two new schemes -- Merchandise Exports from India Scheme (MEIS) and
Services Exports from India Scheme (SIES).
5 different schemes of earlier FTP merged into MEIS. Rewards made payable in the form of duty credit scrip that are freely transferable and can be used to pay for customs and excise duties as well
as service tax.
To move to an online procedure to upload digitally
signed documents to promote Paperless trade in 24x7
environment.
Number of mandatory documents required for exports and imports
reduced to three, which is comparable with international
benchmarks.
Recent reforms initiated by the government Foreign Trade
© Confederation of Indian Industry
Global environment remains soft
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A strong recovery remains elusive across the developed and developing world - US is recovering, Euro area showing some signs of growth while China and Japan continue to moderate
Rates of growth are not as strong as previously expected despite the global fall in crude oil prices, with the IMF projecting softer growth across economies’
Strong monetary stimulus being provided by central banks of Europe, Japan and China while US will probably delay its interest rate hike
Commodity prices including oil remain low
Impact on India
Moderation in input and output
prices
Softening of both exports and
imports
Risk appetite remains high in
financial markets
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5.1
6.97.4
8.2Positive Scenario
2012-13 2013-14 2014-15* 2015-16**
1.2
3.7
1.12.0
3.02.4
4.5
5.96.5 7.08.0
9.1
10.6 10.4 10.5
2012-13 2013-14 2014-15* 2015-16Base Case
2015-16PositiveScenario
Agriculture & allied activities Industry Services
India's GDP Growth (2011-12 Series) Sector-wise GDP Growth Rates (2011-12 Series)
Source: MOSPI, CII calculations
• India is currently the fastest growing economy in a global environment that remains soft
• industry and services to grow at a strong pace but agriculture could be a dampener
Economy Forecasts Short term
CII expects GDP growth to lie in the range of 7.8-8.2% in 2015-16
© Confederation of Indian Industry 12
Economic Outlook Medium term
Focus on ‘Make in India” and labor-intensive services sectors such as education and tourism to unleash competitive potential of these sectors
Provide greater impetus to skill development to upgrade workforce from low skilled to more value added jobs and achieve faster growth, job creation and poverty reduction
Increase Investment in agriculture to remove supply bottlenecks in agri-marketing, warehousing infrastructure including cold storages and cold chains, irrigation, agri-rail networks etc. Implement “Single Agriculture Market”.
Expand infrastructure to create new capacity in roads, ports, airports and railways. Enhance capacities of ULB’s to create knowledge on smart cities
A multi-pronged strategy would lead to a medium-term growth rate of 9-10 per cent
© Confederation of Indian Industry
Areas of opportunity
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Land
Companies Act
LabourTransparency, Governance &
Integrity
Corporate governance
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Areas of opportunity Land
The ambitious goals set by the Government including ‘Make in India’, making India self-reliant
in defence, setting up Industrial Corridors and National Manufacturing Investment Zones
(NMIZs), Skill India, Affordable Housing to All and developing 100 Smart Cities, amongst others
are all dependent on large scale availability of land.
CII strongly supports the land ordinance which will exempt projects in key sectors from
mandatory Consent requirements and Social
Impact Assessment
CII believes that the legislation is supportive of farmers who
want to sell their land and receive good compensation; it will enable the government to
facilitate building of rural infrastructure
CII also believes that the ordinance route had to be
taken for quick decision making
CII will work with state governments and political
parties to advocate its view that land acquisition norms need to
be eased for greater industrialization to take place
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Industry has been experiencing obstacles in its compliance with some of the provisions of the Companies Act, 2013 and its Rules. While the government has accepted many of the submissions made by industry, there are still many concerns being faced by industry.
CII continued sustained advocacy efforts to ensure that the new regulatory framework is pro-industry. Many tranches of detailed inputs on the Act and Rules are being submitted to the Ministry of Corporate Affairs.
Acceding to CII submissions, some of the issues with respect to related party transactions; confidentiality in business; loans; fraud reporting etc are slated to be settled with notification of the Companies (Amendment) Bill, 2014 - which awaits passage in the Rajya Sabha.
Other issues that have been recommended to MCA for resolution include provisions relating to onerous requirements for private companies and closely-held unlisted public companies and Section 8 and Government companies; related party transactions; CSR; amounts treated as deposits; loans to employees; criminalisation of offences; alignment with SEBI regulations, etc amongst others.
These amendments will help easier and wilful compliance and implementation of the Act thereby ensuring that the regulatory framework boosts business instead of acting as an impediment.
Areas of opportunity Companies Act
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Simplification of Complex and Disparate labour laws. CII is
working with Ministry of Labour, DIPP and PMO on simplification of labour laws and make them
investor friendly.
For flexibility of engaging and deployment of labour
two most critical labour reforms need urgent
attention.
The Exit clause under the Industrial Disputes Act,
1947 and
Contract Labour Act especially the provision related to abolition of
Contract Labour
Special labour laws for MSME sector which has definite concerns and challenges in managing labour law compliances because of ever-
changing business and employment landscapes
CII is working to promote responsible Industrial labour engagement through regional pilot projects on engagement
parameters with contract labourers
CII is also working on the training of trade leaders to promote best practices in
industrial relations
CII will lead tripartite dialogue process between government ,industry and
labour
Areas of opportunity Labour
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Areas of opportunity Transparency, governance & integrity
Post liberalisation, Indian industry finds itself in a highly competitive and regulated environment – both at home and abroad – which necessitates the adoption of good governance practices in order to avoid punitive actions.
CII has been the lead in the country in endeavoring to engrain values in
corporates replete with governance, accountability, transparency, ethics,
compliance and trust - fostering a culture of good governance and building
corporations of the future
CII will work with industry to curb corrupt practices among companies such as opaque procurement process, wining orders through
bribery, or taking illegitimate favours
CII to set up Centre of Excellence on governance
CII supports Amendment in the Prevention of Corruption Act which is required on the ground that the law makes bureaucrats
vulnerable to the risk of being prosecuted for even such decisions which could be fully
above board. The Act puts the onus on the bureaucrat to prove s/he acted in public
interest
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Areas of opportunity Corporate governance
Work with the Ministry of Corporate Affairs in ensuring that the new Companies Act is truly enabling for industry
Work with SEBI to help remove discrepancies in Clause 49 of the Listing Agreement dealing with related party transactions; definition of independent directors; etc which need to be aligned with the Companies Act, 2013
Work with corporates to promote voluntary adoption of best practices and self-regulation without additional regulations, thus encouraging economic growth through creation of a facilitative streamlined and harmonized environment
CII would expand its work in the area of “Director’s Training” to help the availability of qualified Independent Directors
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CII Theme for 2015-16
Build India: Invest in Development
A Shared Responsibility
© Confederation of Indian Industry 20
Build India: Invest in DevelopmentThe enablers
• Manufacturing
• Entrepreneurship
• Integration with the World Economy
• Strengthening the Knowledge Economy
Promoting Growth & Competitiveness
• Education
• Skill Development
Developing Human Capital
• Infrastructure
• Public- Private Partnerships
• Clean Energy
Promoting Infrastructure Investments
• Women & Child Development
• Public Health & Sanitation
Encouraging Social Development
Development of Financial Sector
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CII Theme 2015-16 enablersPromoting growth & competitiveness
New initiatives of CII
Fast track sectoral policies:
National Steel Policy, National Policy on Capital goods, National Chemical Policy, National Textile Policy
Take the Ease of Doing Business
movement to the states
Create Single Window platform for all regulatory issues related to start-ups
CII Recommendations
CII Start-up Centre as a new Centre of Excellence of CII to scale up start-up ecosystem in India
Encouraging Industry –Academia linkages for innovations
Setting up Strategic Manufacturing Sector Skill Council
© Confederation of Indian Industry 22
CII Theme 2015-16 enablersDeveloping human capital
CII-State government joint initiatives in strengthening
industry-academia collaborations
CII Skill Centres (Multi-skills) to be set up
Model Career Centres in Delhi NCR, Mumbai and Chennai to be created
New initiatives of CII
Upcoming Education policy should de-regulate and provide greater autonomy to higher education
Announce the new National Policy on Skills
Issue Guidelines for Apprenticeship (Amendment)
CII Recommendations
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The treatment of the infrastructure sector with respect to non-
performing assets (NPAs) should be different from that accorded to the
manufacturing sector.
At par with global practices, PPPs should have arrangements for re-negotiation
under an empowered Institutional Mechanism.
Government should “award” projects to private sector only after
FIRST securing key sovereign clearances.
As announced by the Hon’ble Union Minister for Finance in his Budget speech, ccontemporary PPP contracts should be
balanced to meet the requirements of the private and public sector stakeholders and
suitable liquidated damages against sovereign promises should be stipulated.
CII Theme 2015-16 enablersPromoting infrastructure investments
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CII Theme 2015-16 enablersEncouraging Social Development – Women & Child Development
Source: UNDP- Human Development Report, 2014 Source: UN- World Population Prospects, 2012 revision
7957
135
91
118
85
52
127
37
94
Brazil RussianFederation
India China South Africa
HDI Rank GII Rank
985 984
929 933
2000 2010World India
HDI & GII Rank Sex Ratio (India vs. World)
India ranked at 127 out of 152 countries on the Gender
Inequality Index (GII)
The child sex ratio already low has further declined from 927 girls per 1000 boys in 2001 to
918 girls per 1000 boys in 2011
Security of women continues to be a major challenge and a
growing social menace
Context
The way forward
Engage and Partner the Beti bachao, Beti Padhaoinitiative
Launch Indian Women’s Network nationally and expand the foot fall : 12 states, 7 zones and 1400 direct members currently
Engage CII members in CSR projects for empowering women through CII Foundation
Create platforms to accelerate industry efforts towards safety & security of women
© Confederation of Indian Industry 25
CII Theme 2015-16 enablersEncouraging Social Development – Public Health & Sanitation
Source: Harvard School of Public Health Study on ‘Costly non-communicable diseases on rise in developing world’
The absence of an effective public health network results in an
extraordinarily high disease burden
Economic burden of NCDs for India are estimated to be $6.2 trillion for
the period 2012-30
India’s gaping sanitation deficit, particularly in rural India with 68%
households without toilets
Source: WHO-UNICEF Joint Monitoring Program Report 2010
India, 638
Indonesia, 58
China, 50
Ethiopia, 49
Pakistan, 48
Nigeria, 33
Sudan, 17
Rest of the world, 255
Population practicing open defecation (Million)
The way forward
Context
Government’s effort to create a functional toilet
in every school
Strengthen CII’s efforts on Swachh Bharat : Swachh Vidyalaya
through Mission SoS(Sanitation of Schools)
Develop & Disseminate best practices on
Operation & Maintenance and
Behaviourial change under Mission SoS
Develop a sustainable PPP business model to
provide waste management solutions in Urban geographies
© Confederation of Indian Industry 26
CII Theme 2015-16 enablersFinancial Sector
The Government must draw up a road map for a structural shift from a bank-dominated financial systemto a more diverse financial system to reduce burden on the banking sector
There is a need for the Government and the financial sector regulators to work in a concerted manner todevelop an integrated bond, currency, derivatives market at par with the equity market
The successful implementation of Jan-Dhan Yojana must go beyond to reduce India’s overwhelmingpreference for physical cash and promote its endeavor towards a cashless society
For deepening of Capital Markets, there is a need to revisit the investment norms of various domesticinstitutional investors like insurance companies and pension funds while also encouraging participationof retail investors
For addressing the issue of payment delays to EPC contractors, there is a need for the Governmentagencies to clear the genuine dues and expeditiously handle the claims of EPCs
CII Recommendations
CII with the Indian Banks’ Association (IBA) to launch the Financial Conditions Index of India
CII to work with all stakeholders to move Financial Inclusion to “Cash less”
Promoting Growth of Alternate Investment Funds (AIFs)
CII to institute a forum of Government & Industry stakeholders for enhancing financial viability of
Infrastructure Projects
New initiatives of CII
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Building India: A Shared ResponsibilityIndustry’s role in government’s priorities
1. CII National Mission on Smart Cities
Three pillars as the core of a Smart City
Creation of adequate employment opportunities
through economic activity in the city
Enhancement of human productivity through
efficient delivery of goods and services
Improving the vitality of public spaces which would in turn
improve recreational avenues for the citizens, give a boost
to culture, tourism , ecological sustainability etc.
To bring in global experiences and solutions for enhancing capacity of
ULBs through Japan, German and US
Technology Consortia.
To take up 3 pilot smart city projects which could
demonstrate the principles espoused by the Mission & methodology to implement
them on the ground.
To assist & handhold selected city authorities with knowhow and best
practices
To create a repository of knowledge on Smart
Cities for capacity development of ULBs
The way forward
© Confederation of Indian Industry 28
Building India: A Shared ResponsibilityIndustry’s role in government’s priorities
2. CII National Mission on Digital India
To work with the State Governments to address the issue
of Right of Way (RoW)
To identify best practices capturing successful pilots under the Digital India initiative in the country and work towards scale.
Pilot projects in 4 villages to demonstrate viable business
models in rural area.
Key deliverables
Focus
Create an eco-system for enabling Broadband based
services as business
To prioritize, plan and put in place demonstrable strategies and models to roll out the digital implementation
plan
Share an outcome-based approach with Government to
enable adoption of newer technologies
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Building India: A Shared ResponsibilityIndustry’s role in government’s priorities
3. CII National Mission on Sanitation in Schools
Under the ‘Swachh Bharat : Swachh Vidyalaya’
The Hon’ble Prime Minister in his
Independence Day speech last year
espoused the need for a mission on Swachh
Bharat.
The Prime Minister has especially called upon the corporate sector to give
priority to the provision of toilets in schools as part of
their CSR.
Towards accomplishing this national endeavor, CII has launched the Mission
Sanitation in Schools (SoS) to work together with its member companies on construction of 10,000 toilets in
government schools by March 2016.
Evangelising sanitation in schools.
Undertaking management of the initiative on a project mode through the CII Foundation.
Collating & sharing innovative practices, design & technology which is adaptable to the local needs, environmental friendly, cost effective, scalable and replicable.
CII will work with the state and central governments to resolve the sanitation related issues.
Way forward