FICCI's Voice (December 2017)

FICCI's Voice (December 2017)

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  • FICCI COMMENTSON GDP NUMBERS (30 November 2017) Growth numbers are in sync with the expectations and re-affirm that signs of recovery are in sight. The performance of industrial sector has noted an improvement after dropping to the lowest in almost five years in the previous quarter. After the massive destocking undertaken by companies before implementation of GST, production lines are once again coming back on track. It is encouraging to see government’s approach towards resolving GST related issues. We are confident of moving to a seamless GST regime in a few months from now, said FICCI. There has been positive news in the form of improvement in ease of doing business rankings, Moody’s upgrade of India’s rating and the massive recapitalisation plan for banks. This is a good opportunity to further build on the confidence levels. Also, the government should look at further consolidating its reform agenda in the forthcoming Union Budget 2018-19. • FICCI COMMENTS ON WPI INFLATION DATA (14 November 2017) Both wholesale and retail prices edged up in the month of October. The increase was led by firming up of food prices with vegetables segment remaining a key stress point at this juncture. However, this is due to adverse weather conditions and the situation should ease out in the coming months, said FICCI. FICCI would like to reiterate that under the present scenario inflation targeting by the central bank may not be the best approach. The manufacturing sector is showing signs of recovery and it is important to support this improvement through all policy levers. The high real interest rates remain a challenge for the industry. The various measures undertaken by the Government to promote agriculture and agro- processing are a step in the right direction. These should be taken forward with greater vigour. It remains extremely critical to create seamless agri-value chains and agri-infrastructure in the country to minimize wastage and maximise efficiency. Furthermore, agriculture market reforms with regard to APMC Act and e-NAM’s should continue to be encouraged. FICCI’s Voice – SG’s Desk is a service to all our members and also shared with key policy makers and thought leaders. The document is a compilation of FICCI’s views on macro-economic issues that confronts the nation. These issues come to us directly from members, or through deliberations in conferences, seminars etc. on sectoral issues, as also through Government notifications. ** This issue of FICCI’s Voice is a compilation of issues for the month of November 2017 DECEMBER 2017
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  • FICCI’S ECONOMICOUTLOOK SURVEY (27 November 2017) According to the results of FICCI’s latest Economic Outlook Survey, GDP growth is expected to improve to 6.2% in Q2 of 2017-18 and further to 6.7% in Q3 of 2017-18. The slowdown in the economy due to demonetisation and the adjustment impact of GST implementation seems to be bottoming out and as the new indirect tax regime stabilizes, the economy would see an improvement in its performance. This view was expressed by the economists who participated in the latest economic outlook survey conducted by FICCI. The steps taken by the government to reduce the compliance burden related to GST and make its implementation smoother, the comprehensive plan announced for recapitalisation of the banks and the thrust laid on the infrastructure sector have been acknowledged by the survey participants as an indication of government’s clear resolve to address the key issues that are hobbling growth. Even as these steps are taken by the government, the economists emphasised that reviving consumption particularly in the rural and semi-urban areas will be important to give a boost to overall demand in the economy. With the supply chains being impacted more in these areas compared to the urban areas, greater attention here was called for. In this context, it was emphasised that projects such as ‘housing for all’ and ‘electricity for all’ should be expedited as these would improve employment prospects in the rural areas and thereby help improve demand. Strengthening of the agri-supply chains and diversification in the rural areas in terms of the economic activities pursued were also mentioned as steps to improve performance of the economy. The participating economists also mentioned that the government should continue with its emphasis on productive capital investments in the social and physical infrastructure space, even if this requires some calibration of the fiscal deficit target. The projected fiscal deficit number for the current year is likely to be slightly higher at 3.3% according to the economists polled by FICCI. • FICCI WELCOMES THE DRAFT TEXTILES POLICY OF UP GOVERNMENT (28 November 2017) FICCI welcomed the draft Textiles Policy of UP which shall set the vision for the sector in the State. Prior to the release of the draft policy, FICCI had submitted detailed suggestions to the UP Government for formulation of a vibrant and competitive Textiles Policy. It is heartening to see that many of the suggestions submitted by FICCI like open access for existing as well as new units, capital subsidy for new and existing units over and above TUFS, interest subsidy over and above Central Government’s subsidy for technology upgradation have been included in the draft Policy. All this would help in attracting investments in the sector in value added segments.UP has abundant labour force that currently is largely employed in the industry outside the State. This policy has the potential to provide jobs to millions of natives as it is a labor intensive sector.
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  • NEED TOHAVE AT LEAST A MINIMUM PROVISION OF WATER TO INDUSTRY (28 November 2017) FICCI emphasized on the need for a holistic approach and driving change in a different way. There is a need to have at least a minimum provision of water to industry to be able to even recycle and reuse it; usage of irrigation water more efficiently; and freeing up good quality water for drinking purposes. About improving urban water use efficiency as a key solution to India’s short-term and long-term water challenges; and to shift the focus to a scenario where there is shared vision and responsibilities for water augmentation, greater accountability, an incentive framework for going beyond compliance, and a coordinated approach to water supply and management. Water has to be seen as a resilience issue. A five-point action agenda recommended by the FICCI Water Mission towards a holistic and integrated approach is: 1) Constructive dialogue between stakeholders and to a framework of collaborative thinking, planning, and execution; 2) An enabling policy environment that recognises and rewards good practices and innovative applications, and enables scaling up and replication; 3) Policy framework should incentivise innovative technologies and sustainable business models in wastewater management; 4) Need to harness the potential of the private sector which can provide its expertise in project management, innovation and replication of success stories; and 5) Enabling environment and supporting ecosystem for a market for wastewater is the need of the hour to dovetail the agriculture-industry-urban nexus for water and wastewater management through a circular economy approach. • FICCI STATEMENT ON THE LATEST DIRECTION OF THE SUPREME COURT RESTRAINING PROMOTERS FROM ALIENATING PERSONAL PROPERTIES (24 November 2017) The latest direction of the Supreme Court restraining promoters of an Indian company from alienating personal properties in a matter pertaining to a corporate litigation comes as part of a series of such judicial pronouncements that may impinge on the concept of Limited Liability as defined by law. While all those who transgress the bounds of law should be legitimately punished under the laws of the land, violating the principle of Limited Liability can have negative consequences for entrepreneurship and business development in India. Apart from giving due consideration to the principle of Limited Liability, judicial pronouncements should also give due regard to the difference between secured and unsecured liabilities. FICCI hopes that as a respected and hallowed institution the judiciary would pay due attention to the economic consequences of judicial pronouncements. • ELECTRIC VEHICLES ARE ECONOMICALLY & PRACTICALLY VIABLE FOR OUR CITIES AS A MODE OF TRANSPORT (20 November 2017) FICCI highlighted the focus on building a sustainable, digital and integrated mobility ecosystem. The new business models and disruptive technologies in the field of mobility are going to bring about a significant change in our daily lives through effective mobility management and our government’s efforts to embrace this future-oriented mobility ecosystem will go a long way in making our country the hub of smart mobility in the world.
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  FICCI will coordinatewith the government and the industry on devising a roadmap for transition to smart mobility through stakeholder meetings, policy representation to the government and by working on in- house research reports for dissemination of required information to the stakeholders. • FICCI TO LEVERAGE TECHNOLOGICAL EXPERTISE OF THE CORPORATES TO COME UP WITH POSSIBLE SOLUTIONS (17 November 2017) Role of technology is very important in ensuring implementation of road safety rules, catching violation, and punishing offenders, said FICCI. All nations across the world are committed to bring down road fatalities by 50%, however in India it has been increasing rather than coming down. We need huge behavioural shift in the mind-set of people to take collective responsibility in ensuring road safety at every level. Traffic problem is everyone’s problem. It is our own responsibility to follow the rules and respect others on road as well. • FICCI COMMENTS ON THE MOODY'S UPGRADE OF INDIA'S RATING (17 November 2017) Moody’s upgrade of India’s rating is a reaffirmation of the various reform measures undertaken by the government over the last three to four years and we welcome this move, said FICCI. The ratings upgrade along with the recently reported improvement in India’s ease of doing business ranking underline the fact that we are moving in the right direction. India’s growth story is more promising than ever and we see a further improvement in confidence level of global investment community. This move will not only give a further push to foreign investment inflows into the country but will also enhance our prospects of borrowing money abroad at better rates. The Government’s approach towards reforms has been holistic. The commitment towards assuring a conducive environment for businesses and various measures undertaken for financial and social inclusion are noteworthy. Also, the agility with which the Government has been working towards identifying and ironing out impediments to growth has been remarkable. The Government has been constantly reviewing the Good and Services Tax post implementation to ensure a smooth transition. Further, the recently announced recapitalisation package for banks along with the earlier announced measures will expedite the resolution of stressed assets making space for fresh investments to kick in. The positive impact of all these measures will be seen in the next few years and we see India moving towards a higher growth trajectory. • FICCI’S FOOD SERVICE RETAIL CONCLAVE ‘FOODZANIA- 2017 (14 November 2017) Foodzania is the initiative by FICCI Food Service Retail Task Force which was formed to address the issues faced by the stakeholders in the sector. The Indian F&B sector is poised to witness a sea change. The recent times have seen significant discussions in this sector, which has led to a major reform of allowing FDI in multi-brand retail in India. This is anticipated to bring some game changing impact on the modern retail sector in India and nation at large.
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  However, it isnot a one stop solution to address the challenges of this huge industry. Various issues like Infrastructure bottlenecks, multiple laws and regulations, skill gap etc. still remains a key concern and there is need to deliberate on these ground realities. The Government has allowed 100% FDI for trading including through e-commerce, in respect of food products manufactured or produced in India. 100% FDI is already permitted in manufacturing of food products through automatic route. This will provide impetus to the foreign investment in food processing sector, benefit farmers immensely and will create vast employment opportunities. This has enhanced investment opportunities in India globally and have generated interest among the leading world food retailers for making investment in India. I am confident that this conference will come forward with new ideas that will boost the growth of the F&B sector, at the same time, enhance consumers’ welfare. • GOVERNMENT SHOULD GRANT INDUSTRY STATUS TO THE FOOD SERVICES SECTOR (14 November 2017) Underlining the importance of the Food Services sector, FICCI said that India’s overall retail opportunity is substantial, and coupled with a demographic dividend (young population, rising standards of living and upwardly mobile middle class) and rising internet penetration; strong growth in retail & e-Commerce is expected. The Indian government’s ambitious Make in India, Digital India, and Start up India project is indeed giving a great stimulus to the food services retail sector. It is imperative for the Government and regulators to recognize the contribution and role of Food Services Industry and take measures to create positive policy framework for industry’s growth. • PRIVATE SECTOR TO CONSIDER RECOGNITION OF PRIOR LEARNING TO SKILL AND UPSKILL PRIVATE SECURITY WORKFORCE (10 November 2017) FICCI stated that the government should authorise more institutes to skill and upgrade manpower in the private security sector. The minimum qualification for becoming a constable in the police force was 12+, but the private security industry was providing employment opportunities to the youth at the grass root level, even to those who had completed only 7th or 8th standard. There was a need to make skilling robust for private security sector as it was lagging behind. FICCI said that the government had not been able to fulfil the security needs of the nation creating a vacuum in the system. This became a business opportunity for the private sector and now the private security industry was meeting the demands of the market. He added that public policy, enforcement of the Private Security Agencies (Regulation) Act (PSARA), availability of skilled manpower, licensing and compliance requirements, were some of the challenges that needed to be addressed. • BETTER EDUCATION WOULD FACILITATE IN CREATING A BETTER TALENT POOL FOR INDUSTRY (9 November 2017) FICCI said that the student is the epicenter in Education 4.0 which is giving way to personalized learning with the use of collaborative technology. Education institutions and regulatory framework have to embrace 4.0 technologies and processes. Besides, flexible regulatory framework and academic, financial and administrative autonomy are imperative for higher education going forward.
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  The emphasis hasbeen on teaching and not on learning which needs to change in India. The education sector is undergoing disruptive changes with the advent of new pedagogy, assessment systems and delivery of knowledge. Therefore, there is a need to focus on learning which is outcome and result- oriented. Emphasising the importance of quality education, FICCI said that better education would facilitate in creating a better talent pool for industry. Thus, there is a need to create an enabling atmosphere where the government, academia and industry could work in tandem and create synergies to take Education 4.0. forward. • INDIA’S BUSINESS REFORMS: GOVERNMENT SHOULD ALSO CONSIDER REFORMS IN THE AREA OF REGULATORS (4 November 2017) FICCI said that India’s Business Reforms only reflects the government’s determination to take bold and far reaching reforms required to transform India into a New India as envisioned by The Prime Minister of India. Congratulating the Prime Minister for the significant improvement in India’s ranking, FICCI said that it stands committed to Prime Minister’s aim of perform, reform and transform to place India amongst the first fifty countries in terms of ease of doing business. There are number of areas where our rank may not have improved significantly but at least the direction is there to make that process more efficient and simpler in terms of compliance. Starting a business, construction permits, enforcing contracts, registering property and other such areas needs improvement for the efficient functioning of the business organisations. The Government should also consider reforms in the area of regulators as they impact the cost as well as ease of doing business significantly. For more details contact FICCI Membership at [email protected]