Indian businesses operate in most liberal ecosystem in world: CII President

Kamineni says we need to build our SMEs so that their productivity levels match up to world's best

SHOBANA KAMINENI, president of Confederation of Indian Industry (CII), spoke to Nivedita Mookerji on how the Indian industry has matured through the years of Independence. Edited excerpts:

As a corporate leader, how do you see 70 years of Independence in relation to Indian business?

It has been a long and notable journey for Indian business, to start basically from scratch and go on to become one of the most influential countries in the world for business. Seventy years after Independence, we can be proud of our attainments in many areas. Many Indian companies are among the top five in the world in their product categories, and many more have successfully restructured to reach global benchmarks of quality and sustainability. Today, Indian businesses operate in an ecosystem that is among the most open, liberal and competitive in the world, and have leveraged opportunities like never before. They are reaching out to remote villages and empowering workers, communities and societies.

 

Is there any area which needs special attention?

While top companies are globally competitive, we need to build our small and medium enterprises so that their productivity levels match up to the best in today’s globalised economy.

If you had to list the top success stories in Indian businesses, who would you name and why?

There are numerous success stories in Indian business. I would like to point to the notable achievements in various sectors. Our information technology and software exports are by far the largest in the world. In pharmaceuticals, 60 per cent of the world’s generic market is supplied by Indian companies; the aviation sector is the fastest-growing in the world; telecom has succeeded in reaching almost the entire population within a short span of time; and in automotives, Indian companies are supplying high-quality components to original equipment manufacturers. Even in areas such as research & development and innovation, sustainability, and corporate social responsibility, Indian entities have emerged as significant participants…. One major achievement that is seldom talked about is the strength of our distribution system, which is able to reach the remotest village.

How do you view the transition of Indian businesses through the years of licence raj, reforms, policy paralysis and then reforms again?

The Indian industry has proved itself to be resilient and adaptable. It is not just the domestic policy environment that has been changing over the last 70 years, but also the global environment and technology advances. Companies are constantly aligning with new modalities, strategising to leverage the opportunities and minimise the risks.

How will the recent reform initiatives by the National Democratic Alliance government change things?

We have been encouraged by the proactive and accelerated reforms agenda, which promises to set a strong foundation for the future and make India one of the most vibrant economies in the world. Over the years, the rise of the consumer class with higher disposable incomes has been propelled by targeted government policies for inclusive development, and recent reforms such as the goods and services tax, the Insolvency and Bankruptcy Code, foreign direct investment liberalisation, and ease of doing business policies are creating a new space for the Indian industry. In the past, the Indian industry has been too tolerant of a difficult business environment. States are now actively trying to improve their ease of doing business and some have made good progress. A difficult business environment discriminates against small businesses as it imposes higher transaction costs. The use of technology can significantly reduce the interface between the government and the business.

From here on, how do you see the Indian industry’s road map?

We see strong signs of growth continuing into the medium and long term, with India remaining at the top of the world gross domestic product growth charts. With a stable global economy, rising middle-class incomes, strong public investments, and vibrant entrepreneurship, the Indian industry views the future with great optimism. The government has gone all out to improve the climate for investments over the last three years, and has maintained macroeconomic stability. With low inflation and falling interest rates, we expect the demand to pick up, encouraging investments across sectors. As we head towards India at 75 in 2022, the Indian industry is gearing up to add 1 percentage point extra growth each year, which we feel can come from increased infrastructure spending, unlocking the potential of women in the workforce, and continued reforms process.

What about employment generation?

Job creation will be a central preoccupation for industry, especially in the formal sector for better quality jobs. We will work on skilling and employability as well as more job-generating investments. Going forward, the Indian industry should align more closely for a leadership role in the emerging technology revolution. The reforms process needs to continue, particularly at the state level.