Interaction with Media by Dr. Mahesh Gupta, President, PHD Chamber of Commerce & Industry

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PHD Chamber Vision 2016 

Interaction with Media by Dr. Mahesh Gupta, President, PHD Chamber of Commerce & Industry; 22.12.2015; 11.30AM

  1. Economic Reforms
  • We appreciate the dynamic economic vision of the new government in providing a major breakthrough to the economy during the last one and a half years.
  • The government’s focus on financial reforms, infrastructure build-up, industrial development, growth of MSMEs and agriculture reforms is highly encouraging.
  • The dynamic reform measures such as Make in India, digital India, Swachh Bharat, Jan Dhan Yojana, pension schemes, launch of smart cities and eBiz platform would go a long way to put India’s growth on the high road in the coming times.
  1. Economic Growth
  • We are proud of our country as it has become the fastest moving emerging economy in the world economic system.
  • The GDP growth is strong on the back of acceleration in industrial activity in the recent months (October IIP at 9.8%).
  • We look forward to strong industrial growth recovery, with the sector registering double digit growth in the coming times.
  • Revival of demand scenario is also becoming visible as consumer goods grew at around 18% during October 2015.
  • However, the exports are decelerating since the last 12 months but that is majorly due to slowdown in global demand conditions.  
  1. Inflation and Macro-economic Stability 
  • We appreciate the macro-economic stability with a significant decline in inflation that has come about in the last one and a half years with the present government coming to power.
  • We suggest a major focus on agriculture sector reforms to diversify the crop pattern, enhanced productivity, increase in irrigation facilities and seed technology to mitigate the food inflation in the coming times.
  1. Ease of Doing Business
  • Improvement in India’s ranking on World Bank’s Doing Business Index to 130th from 142nd last year is inspiring and we look forward to further improvement in the coming times.
  • Further, India’s ranking on Global Competitiveness Index (GCI) has increased dramatically by 16 ranks to 55th place in 2015-16 from 71 in 2014-15.
  • All this can be attributed to the strong reform measures of the government which have started giving visible outcomes.
  • The improvement in rankings will boost sentiments for production of manufacturers which will give a boost to Make in India program of the government.
  • We look forward to the further improvement in ease of doing business and expect it below 50 in the next three years by 2018.
  1. Implementation of GST 
  • We believe GST will be implemented soon to create a common market within India to reduce the transaction costs and cascading impact of complex tax system.
  • We believe that with the implementation of GST, the growth trajectory will improve by 2 percentage points with a significant improvement in ease of doing business and enhanced employment opportunities.
  1. Transaction Costs 
  • The high transaction costs, both in terms of time taken and the money involved, are adversely impacting manufacturing competitiveness and overall business performance.
  • The policy environment must provide provisions for reducing transaction costs. Radical decisions are needed on the time taken for paper work and permissions on various aspects.
  • Improvement in physical infrastructure with targeted outcomes in the areas of road development, quality of railway services, expansion of ports and civil aviation would be appreciated and would help the businesses to plan their production possibility frontiers.
  • Reforms in the energy sector are needed to stem the increasing energy import dependence and making the policy conducive to facilitate transformation and adaptation. Renewable and clean energy sources must be encouraged.
  1. Reforms in labour laws
  • We appreciate the recent measures to reform the 3 archaic labour laws by the Government.
  • Further, it is suggested to repeal the existing labour laws, which put unnecessary regulatory burden on businesses; simplify the exit rules for Indian and foreign entities and frame a single comprehensive law.
  1. Boost Entrepreneurship 
  • Boost entrepreneurial growth; entrepreneurship-led economic growth will act as a catalyst not to just boost innovation but also create employment.
  • The New Companies Act 2013 is not synchronous with the growth of the businesses as the compliance is extremely high. The most crucial reform with regard to the Inspection Laws is not in the interests of the businesses.
  • Thus, the Act must be revisited with significant amendments that are conducive to the growth of not just large enterprises but micro, small and medium enterprises also.
  1. Level Playing Field 
  • The inverted duty structure, which is a major deterrent for manufacturing in India, should be completely corrected as domestically-produced goods cost more than imported ones in some sectors.
  • As the global integration of the India’s economy is increasing each day and the country is now open to foreign entities at large vis-a- vis liberalization in many of the trade and investment areas, level playing field would be critical for the success of domestic businesses 
  1. Generate Domestic Demand 
  • We believe slowdown in demand is a major deterrent for the potential economic growth of the country and weaker level of employment generation.
  • The time is most opportune to generate demand in the economy vis-à-vis significant decline in the costs of raw material and to absorb a major chunk of skilled and unskilled labour in the productive sectors of the economy.
  • The construction sector is the highest employment provider after agriculture. Boost to the construction sector will facilitate generation of more and more employment opportunities in the economy and a strong rebound in the demand scenario.
  • Our interest scenario needs to be rationalized as our real rate of interest is still significantly high as compared with advanced, emerging and developing economies.
  • Reduction in EMIs would help increase in disposable income of the people and increased level of savings in the economy.
  • A deduction of up to Rs 5 lakh can be made from the current level of Rs. 2 lakhs for interest paid on a home loan on a self-occupied house while calculating the taxable income for a given year. It will give a boost to the demand in housing sector.
  • Enhanced deduction to the level of Rs. 5 lakhs would provide a significant fillip to the economy and enhance India’s GDP by another 2 percentage points and so will be the level of enhanced revenues of government in the long term.
  • We believe decelerating prices of international commodities such as crude oil, steel and cement can be capitalized to give a boost to the construction sector and to build a strong India.
  1. Improving the standards of living
  • The government must focus for improving the standards of living including basic amenities such as education for all, health for all, food for all, housing for all and safety for all and above all…skilling youth of the nation for a better tomorrow and make “Sabka Saath Sabka Vikas” a reality.
  1. Skill Development
  • Skill development of the youth is crucial to enhance our productivity in agriculture, manufacturing and services sectors and also to improve our global competitiveness.
  • There is need to create at more and more accredited vocational training institutes at different geographical locations for skills which are in short supply. A substantial part of this will have to come from the Government.
  • In addition, the allocation for National Skill Development Corporation should be enhanced to help training and skill development among the youth.
  1. Chamber’s Operational Activities

As our Chamber enters its 111th year, we renew our pledge to Nation Building through business. Our Chamber will continue to promote ethical and global business practices and concentrate on its policy advocacy role through research facilities and help our members understand government policy better.

  • Our Chamber will continue to pursue its thrust areas of Industrial Development, Infrastructure, Housing, Health, Education & Skill Development, Digital India and Agriculture and Agri Business.
  • Implementation of Make in India at the grass roots and improving the ease of doing business are the areas of critical importance for us to enhance employment opportunities and help MSMEs to scale up.
  • We shall continue to work at the national level on issues pertaining to ease of doing business and industrial development
  • Also, we shall continue to work at the grassroots with the states and act as a vehicle of sustainable development. We would be focusing on the rural economy. Food processing and agro-forestry are the potential areas. Supportive policies in these areas can significantly contribute to job creation, enhance rural incomes and promote sustainable agriculture.
  • We shall work towards enhancing international ties for providing new opportunities to the stakeholders for forging a developmental partnership which is not just limited to trade but focus on capacity building, human resource development and productive investments.
  • Our focus would be on India’s participation under Market Access Initiative (MAI) of Ministry of Commerce and Industry, Government of India in various emerging and developing economies.
  • Under the Rural Development Foundation (PHDRDF), we would like to promote socio-economic development from grassroots; projects such as building more check dams, undertaking more health camps, awareness campaigns and skill development initiatives.
  • Under the ambit of Family Welfare Foundation (PHDFWF), we would like to promote activities such as sanitation programme for girls, self defence training programme for girls & women, health posts in slum areas and community development through awareness on soil conservation and empowerment through capacity building.
  • We are committed to promote investment environment and would be working to facilitate foreign investors to come and invest in India. Simultaneously, we would be facilitating our exporters and investors to tap global market opportunities.
  1. Transforming India- Together We Can & Together We Will 
  • We envisage a Transformed India where the economy is in double digit growth trajectory, the manufacturing sector is globally competitive, the agriculture sector is sufficient to sustain the rising population and millions of jobs are created for socio-economic growth of the nation.
  • The Transformed India will be the dream India which will provide housing for all, education for all, easy access to medical and health facilities as well as safe and better standards of living to the population of India.
  • Transformed India would promise every citizen to realize his or her potential and contribute towards self, family and the country. In short, New and Transformed India will have numerous success stories to tell, demonstrate and sell to the world.

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