CII's Agenda for 2010 - 2011- Harshad More

8/7/2019 CII's Agenda for 2010 - 2011- Harshad More

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Confederation of Indian Industry

About CIIAbout CII

Works to create and sustain an environment conducive to thegrowth of industry in India, partnering industry and governmentalike through advisory and consultative processes.

Founded 114 years ago, a non-government, not-for-profit, industryled and industry managed organization.

Direct membership of over 7800 organizations from the private aswell as public sectors, including SMEs and MNCs.Creates a conducive, enabling climate for Indian businesses topursue sustainability goals.

With 64 offices and 7 Centre's of Excellence in India, and 7overseas in Australia, China, France, Singapore, South Africa, UK,

and USA, and institutional partnerships with 223 counterpartorganizations in 90 countries, CII serves as a reference point forIndian industry and the international business community.

Confederation of Indian Industry ' services includes and covers WTO, TQM, TPM, Technology & IPR. SME, Skills Initiative, Library,

Invest India Services, Intellectual Property Rights (IPRs),InformationRisk Management, Green Business, Exports, Environment


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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

CII Estimates GDP Growth at 8.0 8.5% inCII Estimates GDP Growth at 8.0 8.5% in

2010-112010-11

Rainfall during 2009 was significantly deficient at 23% ledto decline in agricultural production

A recovery in agriculture likely in the coming year leadingto upside in GDP growth; Industry and services to remainstrong as capacity expansions take place to takeadvantage of rising demandSource: CSO, CII Research

India has weathered the global economic crisis better than

other countries EIU. India considered an emerging economic superpower and

part of G20.

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Indias economic outlook remains veryIndias economic outlook remains very

robustrobust

India has thepotential to growfastest over thenext 30-50 yrsifdevelopment

proceedssuccessfully

0

1

1

2

$2T

2009

$1.2T

2015(estimate)

$1.8T

India real GDP (at 2009 prices)

GDP expected to growat

~ 8% to reach ~$2T by2016

0

10

20

30

40

$50T

China

44

US

35

India

28

2050 GDP

103 1Currentrank

India projected to be

#3 largest economy by2050

Calendar year; Exchange rate: INR50= USD1Source: Euromonitor; EIU; Goldman Sachs(BRIC report)

8%

CAGR

*

4


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However we face Significant ChallengesHowever we face Significant Challenges

Global developments: Developments in EU-Greece

highlight the fact that global conditions will remainvolatile 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 significantHowever we face many significant

challengeschallenges

Source: 1(% 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)

High Poverty rates:- Unacceptable poverty

(37%1)

- 456M2 people live on


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Two biggest sources of employment in ourTwo biggest sources of employment in our

economy are agriculture & private sectoreconomy are agriculture & private sector

Note: *Excludes unorganized workers in the organized sector; ^consists of those in the working age group (15-59) actively seeking employment;1 includes community, social and personal services; 2 includes mining and quarrying; transport, storage and communication; finance, insurance, realestate; electricity , water etcSource: Registrar General of India; NSSO; Indiastat; Labour Bureau of India

0

20

40

60

80

100%

Urban(29%)

Rural(71%)

402

Others

Construction

Manufacturing

Trade,hotel,restaurant

Agriculture

402

Public

Private

201

Em ploymentby location& sector (M); FY 200 7

Services

7

G t t t



-25

0

25

50

75

100

125

Expectedincreasein numberof jobsby sector(M); FY 2007-12

FY 2007-12

58

FY 2007- 17

120

-4

Go ng orwar , t e pr vate sector wo ng orwar , e pr va e sec or wneed to be the primary driver of creatingneed to be the primary driver of creating

new jobsnew jobs

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

Private sector growth needs to increase from projected9.5% growth to ~12%+ annually to close job gap

Finance, insurance, realestate and business services,

Trade,hotel,restaurant

Manufacturing

Community,social andpersonal

services

Construction

Transport,storageand

communication

Agriculture

Mining & quarrying

Elec. gas & water supply

8



Four key enablers for faster sustainableFour key enablers for faster sustainable

growth over the medium termgrowth over the medium term

CII Theme 2010-11: Business forlivelihood

Businesses are part of civil society

Creating jobs is the best CSR activity

Create jobs &

livelihoods

Sustainable

enterprise

Education

Innovation

Qualified

talentpool

Effectivebusinesspractices

Employability

Entrepreneur-ship

3

4

1

2

9



How do we achieve this vision?How do we achieve this vision?

We need to aim for sustained 10% GDPgrowth

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Vision 2010-11Vision 2010-11

Agriculture Manufacturing Services Infrastructure

Social

and

Corpor

ate

impera t

ives

Business for livelihood(Education & Employability, Innovation & Entrepreneurship)

Art, sports & literature

Healthcare

Inclusive society &

affirmative action Economic policy, reforms,

governance &implementation

Energy, water & climatechange

Urbanization & future cities

Education & skills

Corporate governance

Entrepreneurship, innovation

& competitiveness Trade & globalization

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Ten Point Agenda for 10% GrowthTen 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 InclusionAim is to Achieve a Sustainable and Inclusive 10% Growth

by 201412


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1. Achieving 4% Sustained Agriculture1. Achieving 4% Sustained Agriculture

GrowthGrowth

To do: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 initiativesSpecial Task Forces constituted to address issues related to

agricultureSpecial Task Force on Monsoons

Virtual stagnation in Agriculture due toVirtual stagnation in Agriculture due to Poor infrastructure Collapse of Agricultural Extension System Decline in public investment in agriculture/

irrigation Fragmentation of land holdings

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2. Achieving 11-12% Long Term Manufacturing2. Achieving 11-12% Long Term Manufacturing

GrowthGrowth

Need an Enabling Manufacturing Policy to include

Simpler clearances and approval mechanism Encouragement to Green ManufacturingTechnologies

Appropriate Infrastructure

Flexible labour rules without diluting socialsecurity net

Easier exit policy

Friendly tax system GST and a well consideredDTC

FTAs and CECA/CEPAs to be entered into with careand consideration

Government support needed for Technologyinfusion, development and upgradation in selectsectors

Land Acquisition and R&R Laws to be in keepingwith requirement of industrialization

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

Proposed NMIZ

Policyaddressesthese issues,therefore,needs quickenactment

Every additional 1%growth in

manufacturingcreates 20-30million additionaljobs

Need to developstrengths in labour-intensive sectorssuch as textiles,consumerelectronics,furniture andindustrial machinery

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3. Taking Services to the Next Level3. Taking Services to the Next Level

CII Initiatives in the services sector include

Developing Public Private Partnership 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

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

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4. Creating world class infrastructure4. 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 issuesof concern in the roads sector and suggest solutions

CII National Committee on Civil Aviation consulting withAirports Economic Regulatory Authority

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EducationEducation (primary and secondary)(primary and secondary) deliverydelivery

system needs significant improvementsystem needs significant improvement

High drop out rates throughout schooling

Teacher to student ratio of1:60 at primary level

Only halfof5th standard students can read 2nd standard text in2008

Only 28% across grades could do simple division sums in 2008

Poor quality of delivery stagnation/decline in learning &comprehension

Source: Annual report, Department of School Education & Literacy; Forbes India Budget 2010 analysis; Annual Status of Education Report(Rural) 2008

020

40

60

80

100%

Initialenrolment

100

ClassI-V

-26

ClassVI-VII

-24

ClassIX-X

-12

38

Highschool

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EducationEducation (tertiary):(tertiary): Gross enrolmentGross enrolment

rates are very low vs. other countriesrates are very low vs. other countriesGER in tertiary institutions is considerably lesser than other

countries

Gross Enrolment Ratio= (number of students enrolled in a level of education regardless of age)/ (population of official school age for thatlevel)

Source: UIS data center; UNESCO Institute for Statistics; Department of Higher Education; Lit search

0

20

40

60

80

100%

Gross enrolmentratio in tertiaryeducation(2007)

US A

82

Norway

76

UK

59

Brazil

30

China

23

India

(2006)

12

Govt of India aspires to achieve 30% enrolment in tertiaryeducation by 2020

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5. Education The Big Agenda5. Education The Big Agenda

ObjectiveObjective

To create the intellectual infrastructure and knowledgeworkers needed to sustain high growth trajectory in acompetitive global environment

CII Policy InitiativesCII Policy Initiatives

- Policy Advocacy to make teaching an attractive professionalproposition by addressing remuneration issues. Retainingtalent in the teaching profession

- Developing practical modules to encourage privateinvestment in the education sector

- Support for foreign universities coming to India (ForeignEducational Institution-Entry and Regulation Bill 2010)

- Public-Private-Partnership in developing industry orientedcurriculum and developing industry role in accreditation andrating of institutions

CII, in partnership with GoI will establish 30 Industry-AcademiaInnovation Centres across the country one in each state

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Improving employability is an urgent needImproving employability is an urgent need

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, 20011 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

0

20

40

60

80

100%

5

28

68 75 7880

96

Proportionof vocationally

trainedlabour force (Aged 20-24 yrs)

IndiaMexico

UKGermany

CanadaJapan

Korea

Inadequate vocationalInadequate vocational

trainingtraining

~53% of employed youth sufferfrom skill deprivation1

Barely 10-15% non-engineering

graduates are employable1

Only ~25% engineering graduates1considered directly employable;e.g., Infosys annual trainingbudget is ~Rs 750 Cr2

leads to an employabilityleads to an employability

crisiscrisis

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6. Stepping up Skill Development6. Stepping up Skill Development

ObjectiveObjective

To make India the skills capital of the world. Develop the skillsneeded to support the rapid expansion of manufacturing andservices, and develop a more productive and sophisticatedagriculture sector

CII Policy InitiativesCII Policy Initiatives

- CII is working with Universities to develop vocational trainingcenters. There is already a CII-Delhi University Vocationaltraining program

- Setting up of new skills centres : Gurgaon with ITE Singaporeand 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 forskills and provide placement services for the trained workersLaunch of 10 new CII Skill Development Centres

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7. Conducive Labour Policy to Create7. Conducive Labour Policy to Create

EmploymentEmployment

Objective

To bring together industry, governments, and labor rights groupsand create a policy environment that supports employmentgeneration, inclusiveness and productivity enhancement. Todevelop best practices in labor management and standards thatmeets 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 contractlabor 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 WorkersEducationCII to release White Paper on Labour Regulations

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8. Improving Government Delivery8. Improving Government Delivery

SystemsSystems

Quick implementation of Unique Identification Scheme

Move to a system of cash transfers or coupons compared topresent system of subsidy in specific items

Significant improvement possible in case of targeting foodsubsidies by moving to food coupons that can be redeemedagainst food supplies in any retail outlet

Greater devolution of power to local governance bodies such asPanchayats in rural areas and municipalities in urban areas

Willingness of government bodies to work with private sector forensuring better delivery: PPPs in education and health servicesare promising

Set up regular monitoring/ assessment system using specialgroups comprising experts, government officials and industry, inareas where large outlays are made by government

CII Task Force on Technology for Inclusive Development

CII-State Government Monitoring and Implementation TaskForces

National Sectoral Task Forces (Government / CII) on monitoring

and implementation23


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9. New Urban Centres as Growth Poles9. New Urban Centres as Growth Poles

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 financialpower 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 Indiathrows light on how technology has a role in meeting Indias

urbanisation goals

Structural challenges driven by nature of urbanization in Indiai.e. unprecedented scale, high density cities and

predominantly Brownfield

Policy limitations private participation and Urban LocalBodies functioning with poor execution capabilities

Administrative problems Municipalities are overburdenedresulting in poor levels of service delivery

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10. Financing High Growth10. Financing High Growth

Develop Rupee denominated corporate debtmarket 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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Sma /m cro entrepreneurs account orma m cro en repreneurs accoun or


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Sma /m cro entrepreneurs account orma m cro en repreneurs accoun or~50% of jobs, but multiple issues hamper~50% of jobs, but multiple issues hamper

growthgrowth

Note: Self employed people may or may not be entrepreneurs, and may or may not be skilled

0

20

40

60

80

100%

Peopleemployed

(FY07)

Agriculture

402

Se

lfemployedR

egular/casu

al

workers

201

Private

>10

Private


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InnovationInnovation

Need to develop India specific Innovation Ecosystem Model for

meeting challenges unique to Indias 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 Industrys

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 establishGlobal Innovation and Technology Alliance (GITA) to implement

Governments Technology and Innovation Initiatives national andinternational

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Inclusiveness and Affirmative ActionInclusiveness and Affirmative Action

Indian Industry shares the nations 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 toencourage 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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Corporate GovernanceCorporate Governance

Key Issues

Inadequate number of qualified / competent independentdirectors

Unutilized whistle blowing mechanismsFocus Areas for CII

Directors Training & Orientation Directors Liability Issues Effective whistle blowing methods

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Proactive advocacy for adoption of CII Voluntary

Recommendations on Corporate Governance

T d d Gl b li tiTrade and Globali ation


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Trade and GlobalizationTrade and Globalization

CII Goals

Double Indias goods and services exports by 2014 from currentlevels, double Indias 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-tariff30


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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 newCountries 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

Global EngagementGlobal Engagement

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