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Home arrow News arrow Business News arrow CII President, B Muthuraman announces 5 Pronged Strategy for 10% GDP Growth
CII President, B Muthuraman announces 5 Pronged Strategy for 10% GDP Growth Print E-mail
Written by Anand   
Tuesday, 26 April 2011
New Delhi: B Muthuraman, President, CII has outlined a 5 pronged strategy for 10% growth focused on Fast track implementation of 100 Mega projects, targeting Manufacturing Growth at 12% and its share in GDP at 25%, Creating a Common Market, Improving Investment Climate and Better mechanism for allocation of natural resources.

Manufacturing growth trajectory shift towards an average of 12% and increasing its share to 25% of GDP in the long term will also contribute to the 10% GDP growth, said Muthuraman.

He stressed on the aspirational and visionary leadership in driving rapid export led growth, enhancing labour productivity, building depth and driving the right industrial structure in terms of creation of clusters to drive scale and depth and productivity advantages and capacity building for start-ups and SMEs in addition to encouraging development of innovation clusters.

Fast track implementation of 100 Mega projects can go a long way in bringing the moderating investments back on track, said the CII President.

A Project Monitoring and Implementation Agency setup by the Government with specific timelines on implementation of these projects will help in keeping up the growth momentum at high levels, he said.

The CII President announced that the CII theme announced last year on Business for Livelihood would be continued with a five pronged strategy to aim at 10% GDP growth.

India remains a fragmented market and therefore, all efforts have to be made to make it a single market, the CII President opined. A Common Market could be achieved through early implementation of GST for the industry and services sector and through uniform implementation of APMC Act across states and hurdle free movement of agri produce by abolishing the Essential Commodities Act, he added. The CII-Political leadership interface and CII – State Government interface for early implementation of GST is being pursued with great vigour and would be top of the agenda for CII in the coming year. This could add 1 to 1.5% to our GDP growth through efficiency improvement, he added. He also announced creation of a special committee on GST to facilitate a better dialogue on GST.

Improving investment climate was presented as another major area of reform that needs attention of the Government as India is still perceived as a difficult place for doing business, observed the CII President. He announced setting up of CII- State Government taskforces to work on improving investment climate as several state Government laws and procedures create regulatory hassles and inhibit investments, he added. He also announced that this year 6 states would be covered and would be scaled up to cover other states in the coming years.

Finally to aim at 10 per cent growth, the CII president opined that enhancing transparency, efficiency and sustainability in allocation, pricing of natural resources would be of pivotal importance. He suggested that the process of allocation of natural resources be made transparent and competitive besides adhering to the principles of environmental and social sustainability.

In addition to the 5 pronged strategy, CII President also alluded that for this high growth to be inclusive and sustainable, it was important to have a prioritized focus on Affirmative Action, Employability and Governance. Future growth is expected from the Bottom of the Pyramid and hence faster inclusive growth and development is pivotal for sustaining the high GDP growth, said the CII President.

Stressing on the need for engaging in affirmative action by the industry to target inclusive and sustained high GDP growth, Mr Muthuraman informed that the CII Code of Affirmative Action received an encouraging response and that the experience so far would help scale this number to 2000 in the coming year. In addition, he also announced that CII would conduct a Biennial Diversity Survey, persuade CII members to disclose affirmative action efforts and institute CII awards for SC/ST entrepreneurs and industry members who have excelled in affirmative action efforts.

On employability, Mr Muthuraman stressed on the need for scaling the skills development efforts given the magnitude of the problem. The CII President also suggested that MNREGA could be leveraged for imparting skills in addition to guaranteed employment. CII President announced creation of 4 new CII Skill Development Hubs and Setting up to 30 new District level skill Gurukuls that are Skills Development Centres. In addition to these, CII President also stressed the need for creating National Vocational Qualification framework in consultation with the Government, ILO and the World Bank to integrate the academic education system with the vocational training system.

Highlighting the need for transparency and Governance, CII President said that if the fruits of growth have to translate to the creation of an inclusive development model for India and also if India is to emerge as a global destination for Capital, then the importance of quality of governance in the country cannot be overemphasized. Simplification of rules and procedures for transparent operations, carrying out police, judicial and electoral financing reforms is necessary for improving governance, he added. The CII president announced that CII would develop a Code of Conduct on integrity and transparency and encourage CII members to adopt the code. In addition he also mentioned that a CII Task Force on Integrity and transparency in Governance chaired by Mr Adi Godrej, President Designate, CII to spearhead CII’s and industry efforts in this area.

The CII President also presented his outlook on the economy where he felt that GDP growth is expected to moderate in view of rising inflation and interest rates. Rising global commodity prices have begun to have an impact on the cost of raw materials of Indian companies and capital formation is showing signs of moderation. Despite these adverse developments, GDP growth of 8.0-8.5% should be possible in 2011-12 given that domestic demand remains strong. In the current context this is not a bad growth rate for the economy, Mr Muthuraman added.

According to the CII President, the upper bound of 8.5% growth can be achieved in 2011-12 if certain factors turn out to be favourable. These include a good monsoon, moderation in global commodity prices, moderation in tightening of monetary policy, turnaround in the growth of capital formation, movement on reforms to boost investors’ confidence and continuing strong global demand. However, a sustained increase in oil prices could be a key source of downside risk to growth, he added.

 
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