India’s resilience of exports has increased significantly in the post COVID-19 years. The growth of exports during 2021 and 2022 at 20 per cent and 9.7 per cent, respectively was the highest among the top 20 leading exporters, said a research report.
The PHD Chamber of Commerce and Industry (PHDCCI)president, SANJAY AGGARWAL, is chairman and CEO of the Paramount Cables group. In the latter role, he spearheaded many campaigns for the Indian telecom manufacturing industry that resulted in the government making legislative changes necessary for the survival of the industry. A graduate of the Shri Ram College of Commerce, Aggarwal has been a recipient of numerous awards over the past 35years including the National Small Industry Award 1984 and Entrepreneur of the Year Award 1994. In an interview with RAKESH KUMAR, Aggarwal shares his thoughts on a range of crucial economic issues. Excerpts: Q. The Union government has now put an end to retrospective taxation. Your comments? A. The decision of the Government to put an end to retrospective taxation is highly appreciable and encouraging as it will result in significant reduction in tax disputes in the country. The move will bring in much clarity by eliminating a key source of ambiguity in tax laws. The end of retrospective taxation will spread out as a positive message to the global investor community in terms of India’s constant intention to improve the ease of doing business. It will directly result in attracting more foreign investments as a result of establishment of an investment-friendly business environment, thereby accelerating India’s economic recovery from the impact of Covid-19 pandemic. Q. At a recent CII event, Prime Minister Modi said his government was ready to take political risks for economic reforms while asking the industry to enhance its risk-taking appetite. Do you think the industryis also ready for it?A. The series of broad-based policymeasures undertaken by the Governmentduring the last many quartershave built a significant resilience ofthe Indian economy. This is evidentfrom the uptick in the performanceof lead economic indicators. Thegrowth-centric reforms of the Governmentwith focus on large-scaledigitisation, modernisation, simplificationand facilitation have supportedthe revival of industry. During thepandemic, industry has alreadyincreased its risk-taking appetite byfacing the lockdown and adjusting tothe new normal. Covid-19 haschanged the trade and industrydynamics at the domestic and internationallevel, thereby creating manyopportunities as well as challenges.Now is the time for the industry tofurther boost risk-taking appetite byraising output, increasing exports,and developing ways to increase therevenues and their integration withglobal value chains.Q. In his Independence Day speech,the PM introduced the Rs 100-trillion Pradhan Mantri GatishaktiBharat Master Plan for integratedinfrastructure growth.What do youmake of it?A. Infrastructure development hasalways been a vital component ofeconomic growth, productive investments,job creation, and povertyreduction in India. The availability ofmodern and facilitating infrastructureis a very important requirementfor the growth of industry. The PradhanMantri Gatishakti Bharat MasterPlan is aimed to have interconnectivitybetween road, rail, air and waterwaysfor reducing travel time andimproving industrial productivity.The increased spending on infrastructurewill give a multiplier effectto rejuvenate the aggregate demandin the economy. Undoubtedly, robustgrowth of infrastructure is the keyingredient to realise the vision of AatmanirbharBharat. Futhermore, theinfrastructure growth will createmore employment opportunities forthe youth of the country.Q. Amid the Covid pandemic, theIndian economy continues to be indire straits despite showing somegreen shoots now. The RBI recentlyretained its projection for GDPgrowth for FY22 at 9.5 per cent, butthe growth rate for FY21 was minus7.3 per cent. What, in your view,needs to be done urgently toaccelerate growth?A. The growth rate of (-) 7.3% in FY2021 is not a matter of serious concernas the low economic activity wasmainly due to the stringent lockdownof two months in 2020 to contain thespread of virus. This statistical lowbase effect was expected to providea good opportunity for India to attaina high growth trajectory in FY 2022.Further, the proactive reforms undertakenby the Government in the lastmany quarters have pulled the economyfrom its extreme lows. The gradualscaling back of lockdowns alongwith the astute support of theAtmanirbhar Bharat Mission hasplaced the economy firmly on thepath of recovery. At this juncture,there is a need to further fuel the driversof household consumption andprivate investment to enhance theaggregate demand in the economy asit will have an accelerated effect onexpansion of capital investment inthe country. The Government shouldfrontload the National Infra Pipelineexpenditure. More and more directbenefit transfers needs to be consideredfor the urban and rural poorunder the various welfare schemes inaddition to the free distribution ofdry rations till Diwali as alreadyannounced by the Prime Minister.Vaccination of population should becontinued at a faster pace; let’s targetto vaccinate at least half of thepopulation with both the doses byend of September 2021.Q. In the wake of the devastatingCovid waves and the cycle oflockdowns, the country’s urbanunemployment rate has spiked to adouble-digit figure while the ruralsituation is also dismal.What mustbe done to step up the creation ofjobs in the country?A. The pandemic had significantimpact on economic and industrialactivities in the country, a consequenceof which came in the form ofa deteriorated employment scenarioin the country. At this juncture, furthereffective policy measures areneeded to support demand creationand to maintain employment in factories.Tourism creates millions ofemployment opportunities for theunskilled, semi-skilled and skilledworkforce. However, due to dauntingimpact of Covid-19, the revenues oftourism sector and their ability tosustain their employees have beenhit. So going ahead, the enhancedexpenditure on tourism and hospitalitysector is needed given that theglobal economy is opening up andpeople are looking for internationaltravel. Further, the infrastructuraldevelopment in the country will leadto creation of employment opportunitiesfor the youth. MSMEs andstart-ups are sectors that holdimmense potential to create employmentwith improved ease of doingbusiness. At this juncture, extremefacilitation to these sectors isrequired. Strengthening and providingthe necessary tools and technologiesto MSMEs can create multiplejob opportunities. Furthermore,exploring the new areas to revitalizeexports growth with the improvementin logistics infrastructure andtrade facilitation measures wouldenhance the exports growth trajectoryand create millions of new jobs.Q.What is your assessment of thegovernment’s Atmanirbhar Bharatmission? What is its relevance in ourintegrated, globalised world?A. In May 2020, Prime MinisterNarendra Modi gave a clarion call forAtmanirbhar Bharat and put forwardthe importance of becoming a selfreliantcountry to fulfil the dream ofmaking the 21st century belong toIndia. Atmanirbhar Bharat mission iscommitted towards integrating Indiainto the global supply chain andstrongly positioning the country inthe world economic system. Throughits focus on five pillars, namely, economy,infrastructure, system (technology-driven arrangements), vibrantdemography, and demand,Atmanirbhar Bharat Abhiyaan laysstrong foundations for improving thequality of everything that the countryproduces from education to goodsproduced by indigenous industries.This will help India produce worldclass products and use this strengthto capture a significant market sharein the world. Atmanirbhar Bharatmission lays a perspective of reformsin growth-critical sectors of India tomake the country competitive andattractive. This aggressive push tomake India self-reliant is a welcomeopportunity for global companies totake advantage of policy reforms initiatedby the Government in the areasof manufacturing, infrastructure, digitalspace and healthcare.Q. How do you look at India’sremarkable startups-and-unicornsstory?A. With about 50,000 startups, Indiahas the 3rd largest startup ecosystemin the world. Government of Indiahas a clear intent to build a strongecosystem for nurturing innovationand startups in the country. Startupsencourage effective resource mobilizationof capital and skill, bring innew products and services anddevelop markets for growth of theeconomy. In this way, they helpincrease GDP as well as per capitaincome of the people in our nation.Startups help to remove regional disparitiesand improve the standard ofliving in sub-urban and rural areas.They also contribute towards thedevelopment of society by reducingconcentration of income and wealthand inculcating the spirit of entrepreneurship.Startups have a capacityto generate employment and absorbthe labour force which is readilyavailable.