A day after India Inc met Prime Minister Manmohan Singh to discuss issues related to manufacturing, growth and infrastructure, president of Confederation of Indian Industry (CII) S Gopalakrishnan told FE’s Kirtika Suneja that growth will come back once the uncertainty of elections is over. Edited excerpts:
How was the meeting with the PM? What solutions did the industry get from the meeting?
The government is concerned about lack of growth and has demonstrated seriousness in these matters. The challenges and solutions are known to a great extent, but the new things that we got were related to the timelines for implementing certain processes and giving pre-approvals for projects such as DMIC.
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Besides, we talked of mechanisms for tackling the burgeoning current account deficit (CAD). The PM will come back to us in a month’s time on what can be done in the short and medium term. They also see a sense of urgency and a need for action.
What kind of timelines did you discuss?
The timelines relate to large infrastructure projects and policy implementation for those like in multi-brand retail. This means the time lapsed between the submission of an application and when the actual investments start flowing in. We have identified top 100 projects and their road blocks.
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Besides, we also pitched for simplification of the approval process by a reduction in the number of departments from where approvals are required.
The RBI has lowered the growth forecast to 5.5%. Is that a cause of worry?
This is worrisome as it affects the CAD. In the last two years, very few jobs have been created. Infosys used to recruit about 25,000 people annually but last year, we hired only 5,000 engineers. It is a jobless growth actually. Besides, decision making has slowed down or come to a halt because of various factors. However, once we go beyond the uncertainty of elections, growth will come back.
How do relaxations in the foreign direct investment policies affect manufacturing?
There are two ways to improve manufacturing. It can be forced through policy and second, through economic measures by creating a competitive environment, infrastructure and logistics which will lead to more sourcing from the country. This has happened with the information technology (IT) and auto sectors. In fact, through this, we can create a large pharma industry also.
What is your outlook for the IT industry with respect to hiring and challenges?
There are three challenges for the IT industry ? the global economy which still has not come out of the downturn, the US Immigration Bill and core solutions getting commoditised with technology moving towards the cloud. As for hiring, we will disappoint engineering graduates this year. So, overall things are improving but growth is muted.
