Membership Department 2009-10

Transcript Membership Department 2009-10

CII’s Agenda – 2010-11 and beyond……

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.

Agriculture Industry Services GDP 2008-09

1.6

3.9

2009-10

-0.2

2010-11 E

2.0 8.5 9.3 8.0 – – – – 3.5

9.0

9.5

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

Source: CSO, CII Research

India’s economic outlook remains very robust…

GDP expected to grow at ~ 8% to reach ~$2T by 2016

India real GDP (at 2009 prices) * $2T $1.8T

India projected to be #3 largest economy by 2050

2050 GDP $50T 44 40 2 $1.2T

30 1

8% CAGR

20 1 10 0 2009 2015 (estimate)

Calendar year; Exchange rate: INR50= USD1 Source: Euromonitor; EIU; Goldman Sachs (BRIC report)

rank © Confederation of Indian Industry 0 Current China 3

“ India has the potential

to grow fastest over the

next 30-50 yrs…if development proceeds successfully”

35 28 US 1 India 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.

However we face many significant challenges Current

• High Poverty rates: - Unacceptable poverty (37% 1 ) - 456M 2 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

Future

• 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: 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)

Two biggest sources of employment in our economy are agriculture & private sector

Employment by location & sector (M); FY 2007 100% 80 402 Urban (29%) 402 Others Construction Services 60 Manufacturing Trade, hotel, restaurant 40 Rural (71%) 20 Agriculture 0 201 Public Private

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, real estate; electricity , water etc Source: Registrar General of India; NSSO; Indiastat; Labour Bureau of India © 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 2007-12 125 120 100 75 58

Finance, insurance, real estate and business services, Transport, storage and communication Mining & quarrying Elec. gas & water supply Construction

Community, services social and personal

25 0 -4

Manufacturing Trade, hotel, restaurant Agriculture

-25 FY 2007-12 FY 2007- 17

Private sector growth needs to increase from projected 9.5% growth to ~12%+ annually to close job gap 7

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 © Confederation of Indian Industry

Four key enablers for faster sustainable growth – over the medium term

1 2 Education Employability

Qualified talent pool

Sustainable enterprise Create jobs & livelihoods 3 Innovation 4 Entrepreneur-ship

Effective business practices

CII Theme 2010-11: Business

for

livelihood

“Businesses are part of civil society” “Creating jobs is the best CSR activity”

How do we achieve this vision?

We need to aim for sustained 10% GDP growth

Vision 2010-11

1 0 Agriculture

Business for livelihood

(Education & Employability, Innovation & Entrepreneurship)

Manufacturing Services Infrastructure

• • • • • •

Art, sports & literature Healthcare Inclusive society & affirmative action Economic policy, reforms, governance & implementation Energy, water & climate change Urbanization & future cities

• • • •

Education & skills Corporate governance Entrepreneurship, innovation & competitiveness Trade & globalization

Ten Point Agenda for 10% Growth

10.

Agriculture needs to grow at a sustained rate of 4% Manufacturing needs to register 11-12% long term average growth Service sector needs to remain robust and a growth driver Physical Infrastructure needs to be of global standards Education would have to be the centre of reforms Skill development would need a massive step up Labour environment and rules need to be conducive to employment creation Delivery mechanisms of Government need to be streamlined Need New Urban Centres to come up as growth poles 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

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 © 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

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

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

Education (primary and secondary) delivery system needs significant improvement

High drop out rates throughout schooling

100% 80 60 40 20 0

100

Initial enrolment -26 Class I-V -24 Class VI-VII -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 5

standard students can read 2

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

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 60 59 40 20 30 0 USA Norway UK Brazil 23 China

India (2006)

Govt of India aspires to achieve 30% enrolment in tertiary education by 2020 17

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 © 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 18 CII, in partnership with GoI will establish 30 Industry-Academia Innovation Centres across the country – one in each state

Improving employability is an urgent need

Inadequate vocational training…

Proportion of vocationally trained labour force (Aged 20-24 yrs) 100% 80 68 75 78 80 60 96 40 28 20 5 0 India UK Mexico Canada Germany Korea Japan

…leads to an employability crisis

• ~53% of employed youth suffer from skill deprivation

• Barely 10-15% non-engineering graduates are employable

• Only ~25% engineering graduates

considered directly employable; e.g., Infosys’

annual training budget is ~Rs 750 Cr 2

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

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

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

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

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 74 th 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

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:

Small /micro entrepreneurs account for ~50% of jobs, but multiple issues hamper growth

Self/small scale employment accounts for large portion of workforce People employed (FY07) 100% 402 201 201 80 Public Private >10 60 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) 40 • Corruption, especially at grassroots 20 0 Total employed By type By ownership Non-agri employed Note: Self employed people may or may not be “entrepreneurs”, and may or may not be skilled

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 26 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

Inclusiveness and Affirmative Action

 

CII has developed a voluntary Code of Conduct for members to implement positive discrimination



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 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

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

28 Proactive advocacy for adoption of CII Voluntary Recommendations on Corporate Governance

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 Focus on sector specific export competitiveness strategies

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

Membership Department 2009-10

Transcript Membership Department 2009-10

CII’s Agenda – 2010-11 and beyond……

CII Estimates GDP Growth at 8.0 – 8.5% in 2010-11

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

However we face Significant Challenges

Global developments:

Exchange rate:

Trade prospects:

Inflation:

However we face many significant challenges Current

Future

Two biggest sources of employment in our economy are agriculture & private sector

Going forward, the private sector will need to be the primary driver of creating new jobs

Four key enablers for faster sustainable growth – over the medium term

CII Theme 2010-11: Business

livelihood

How do we achieve this vision?

We need to aim for sustained 10% GDP growth

Vision 2010-11

Business for livelihood

Ten Point Agenda for 10% Growth

1. Achieving 4% Sustained Agriculture Growth

Virtual stagnation in Agriculture due to

To do:

2. Achieving 11-12% Long Term Manufacturing Growth

3. Taking Services to the Next Level

4. Creating world class infrastructure

Education (primary and secondary) delivery system needs significant improvement

Education (tertiary): Gross enrolment rates are very low vs. other countries

5. Education – The Big Agenda

Improving employability is an urgent need

…leads to an employability crisis

6. Stepping up Skill Development

7. Conducive Labour Policy to Create Employment

8. Improving Government Delivery Systems

9. New Urban Centres as Growth Poles

10. Financing High Growth

Small /micro entrepreneurs account for ~50% of jobs, but multiple issues hamper growth

Innovation

Inclusiveness and Affirmative Action

Corporate Governance

Trade and Globalization

Global Engagement

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