 "Industry seeks trade-off: Will 'Make in India' in return for ease of business")
Following the first-of-its-kind meeting between PM Modi, captains of industry, bankers and economists on Tuesday, India Inc is clearly looking for a trade-off: while it is seeking ease of doing business from the government, it is ready to commit to Modi's 'Make in India' call. The message sent across is "industry wants progress for India, and is supportive of the government".
Many industrialists and bankers contacted by Business Standard chose not to participate in this story, while others spoke off-record. Most admitted investments had failed to pick up, citing low demand as the primary reason. One of those invited to the interaction, at 7 Race Course Road, told this newspaper there was no room for countering the PM's perception because of the format of the meeting. "There was no discourse," he said.
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Confederation of Indian Industry (CII) president Sumit Mazumder, among the 27 invitees to the meeting, said he disagreed with the feeling within the government that industry lacked courage to take risks and that it had not been supportive enough of the current political regime's policy initiatives. He, however, added "it is not the government's responsibility alone to spur demand". Industry must do its bit, too, according to Mazumder.
Rana Kapoor, head of the Associated Chambers of Commerce and Industry of India (Assocham) and an invitee to Tuesday's meeting, said, "Industry needs to complement the enabling measures undertaken by the government with proactive steps of our own to boost demand creation and promote investments…To seize opportunities and to further build the spirit of 'carpe diem' in India, we need to work towards a laser-focused execution methodology."
A promoter of a prominent start-up supports the PM in his observation on declining risk-taking by Indian industry. He argues "traditionally, India Inc has not been a primary investor in new-age technology companies. Most of them are funded by foreign money". Why was Indian industry not incubating or supporting these companies, he asked. "When he spoke of risk-taking ability, the PM wanted traditional companies to innovate," the promoter interpreted.
Asked to comment on the overall mood of disappointment with India Inc, Nirmala Sitharaman, minister of state for commerce and industry told this newspaper, "I don't feel betrayed by industry…But I wish they (industry) were far more articulate about their expectations from the government."
Industry thinks its engagement with the Narendra Modi government has been far less than expected. Now, it was looking for regular interactions, if not with the PM then at least with some of the top policymakers, Mazumder of CII said. "We need a dialogue on the issues we raised." Industry's primary demand is 'ease of doing business'; in return, it would focus more on 'Make in India', the CII president said.
Assocham has told the government the balance sheets of public sector banks have largely been impaired due to protracted delays in financial closure, owing to cost overruns and the inability of banks to further finance those. "Most Indian promoters do not have this requisite capital. To get these projects on track, we will require stop-gap hybrid equity funding as mezzanine facilities (provided by a bank or the relevant apex institution of a ministry) to ensure stalled projects are completed, with monthly updates sent to the relevant ministry/PMO (Prime Minister's Office)/bank," it said.
Another point made by the chamber was with proper due diligence, transparent auctioning practices should be encouraged to buy out existing/advanced stalled projects. So, has the equation between India Inc and the NDA government changed? "There's no change in the equation. But there's confusion on what is expected out of the other, and how much has been delivered," said an industry representative.