Rebranding India in the 21st Century

Special Report

India’s vision of sustainable growth in the agriculture sector is a level-headed proposal that need cooperation from all sections of society. India’s aim for investment in manufacturing is meaningful, but aim for investment in the low carbon emission sector will be much more prudent for improving health and well-being by following age old

India’s BJP-led government aims to achieve growth in the range of 7-8 percent within the next three-four years, and bring the fiscal deficit down to 3 percent of the GDP. Finance Minister Arun Jaitley recently remarked: “We cannot leave behind a legacy of debt for our future generations; we cannot go on spending today which would be financed by taxation at a future date.” The mandate to bring change in macroeconomic stabilisation, lowering inflation within 3-4 percent, and to bring down fiscal deficit and current account deficit are signs for possible economic robustness in future.

Manufacturing in India

Former Prime Minister, Dr Manmohan Singh, had cleared the draft of the policy that aims to increase the share of manufacturing in the country’s GDP to 25 percent by 2025, from 16 percent in 2011. The policy has proposed establishing National Investment and Manufacturing Zones (NIMZs) that will be projected as mega investment regions, equipped with the world class infrastructure. An official statement released by the Government reveals that Dr Singh has observed that the proposed measures will reduce the compliance burden on industry. The manufacturing policy emphasises on setting up a Manufacturing Industry Promotion Board in order to ensure coordination between Central and State governments. It also encourages Indian companies to develop indigenous technology through fiscal incentives and subsidies.1 The present government has identified 25 sectors where India can become world leader. These include automobiles, chemicals, IT, pharma, textiles, ports, aviation, leather, tourism and hospitality, wellness, railways and others.

Success through Investment

Again, with an aim to turn the country into a global manufacturing hub, Prime Minister Narendra Modi unveiled his ambitious ‘Make in India’ campaign. Modi expounded that ‘Make in India’ is not a slogan, it is not an invitation but it is a responsibility for all of us. If Indians treat this as a responsibility, people will come in from across the world. In the next decade, India expects to ramp up manufacturing to 25 percent of the GDP. Indian government aims to create 100 million jobs in manufacturing by 2022.

India, world’s fourth largest crude steel producer, is aiming to become the second largest producer of steel soon. The present prime minister noted in a column in the Wall Street Journal: “We will create world-class infrastructure that India badly needs to accelerate growth and meet people’s basic needs. We will make our cities and towns habitable, sustainable and smart; and we will make our villages the new engines of economic transformation.” PM Modi stated that ‘Make in India’ is our commitment - and an invitation to all - to turn India into a new global manufacturing hub.

Success through Investment Abroad

The Reserve Bank of India (RBI) has recently liberalised/rationalised guidelines for investments abroad by Indian companies. It has raised the annual overseas investment ceiling for Indians to $125,000 from $75,000 to set up joint ventures (JV)/wholly owned subsidiaries. The Government of India’s supportive policy regime, coupled with India Inc’s experimental orientation is certain to demonstrate an upward trend in outward Foreign Direct Investment (FDI) in the coming years.2 In a bid to increase business and strengthen their global presence, more overseas investments by leading Indian firms are on the anvil. Economists and policymakers anticipate that Indian industry is expected to increase revenue from Africa.3 According to Rajat Gupta, Director, McKinsey & Co, IT services, agriculture, infrastructure, pharmaceuticals and consumer goods are the key to India boosting Africa revenues four times to $160 billion by 2025.

Success through Infrastructure Development

The Government has simplified the rules for FDI in construction, where 100 percent FDI is permitted. According to the notification, 100 percent FDI will now be allowed under the automatic route in completed projects pertaining to operation and management of townships, malls and business centres. Additionally, foreign investors will now be allowed to exit a project even before it is completed. The norms are expected to provide a major boost to overseas investors. To promote the aim, the Government of India had awarded a contract worth Rs 1,370 crore to Ricoh India Ltd and Telecommunications Consultants India Ltd (TCIL) for modernisation of 129,000 post offices through automation. This is expected to improve service quality at these post offices, provide value added services and also lead to desirable outcomes in terms of financial inclusion and e-governance. The revenue opportunity from these government projects is expected to be around Rs 25,000 crore over the next few years.

In order to sustain the growth, physical infrastructure will need to be prioritised: the Asian Development Bank estimates that $8 trillion is needed for infrastructure development. Demographics will pose a challenge4. India is amongst the top five countries in the world leading the global green building movement with over 2,380 registered green building projects. The coverage of green building technology has moved up to 1.82 billion sq feet in 2013 from 20,000 sq feet in 2003 and is expected to further increase to 5 billion sq feet by 2017.5

The Government of India plans to roll out the Green Energy Corridor project worth Rs 43,000 crore ($6.9 billion) to facilitate flow of renewable energy into the national grid. India’s onshore wind energy deployment crossed 19.6 Gigawatt (GW), attracting investment worth $16.5 billion in 2012 and is estimated to reach 191 GW by 2030. In fact, the Green Energy Corridor project can be expected to result in the development of an integrated grid across the nation by making its grid compatible for distributing renewable energy.6

Success through Environmental Consciousness

India’s vision of sustainable growth in the agriculture sector is a level-headed proposal that need cooperation from all sections of society. India’s aim for investment in manufacturing is meaningful, but aim for investment in the low carbon emission sector will be much more prudent for improving health and well-being by following age old Indian wisdom - Vasudhaiva Kutumbakam (the whole world is one family). Indian manufacturing sector needs to take concerted action on all three areas: Green Energy; Green Products; and Green Processes in business operations.

International Collaborations

The World Trade Organisation (WTO) achieved a historic milestone on November 27, 2014, when it managed to secure its first global trade deal. This was made possible after ongoing engagements between policymakers in India and the US, resulted in a resolution of India’s concerns on food security. This is a vital step forward towards implementation of the Trade Facilitation Agreement (TFA), which is projected to add around $1 trillion to the global economy and generate over 20 million jobs.

The joint special committee for expediting Japanese investment in India to research, outreach, promote and facilitate Japanese businesses wanting to set up base in Asia’s third largest economy; and the MoU signed by Indian Railways and Republic of Korea on technical cooperation in the rail sector are good symptoms of Indian economy on the move.

A cultural change among the lives of Indians – in India or abroad is currently underway. India should understand the magical power of developmental actions by its own endowed human resources. Let Indians all over the world aim to use the power for appreciating good and positivity of everyone to succeed in the remaining decades of 21st century. Let Indians’ collective wishes, wisdoms, and appreciations be the source for immense power change in this great country.

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Author

Dr Arup Barman

Dr Arup Barman is Director (i/c) at Centre for East Asian Business Studies (CEABS) and Associate Professor at the Department of Business Administration, Assam University. He may be reached at abgeet@gmail.com.

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    References

    1 Manufacturing Matters: Journal of Manufacturing Excellence, July 2011; Page-2

    2 References: Media Reports, Press Releases, Reserve Bank of India website

    3 The Hindu BusinessLine: March 19, 2014; India can quadruple revenues from Africa by 2025: McKinsey report; http://www.ibef.org/research/reports/india-can-quadruple-revenues-from-africa-by-2025-mckinsey-report-19-march-14

    4 Lehmann. Jean-Pierre (June, 2010), The Asian 21st Century: Keys for continued Growth: http://www.imd.ch

    5 Sharma. Aparna. D, Chief Executive Officer, IBEF; India and the global green building movement; http://www.ibef.org/blogs/india-and-the-global-green-building-movement

    6 Sharma. Aparna. D, Chief Executive Officer, India’s Green Energy Corridor; http://www.ibef.org/blogs/india-green-energy-corridor

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Diplomatist Magazine was launched in October of 1996 as the signature magazine of L.B. Associates (Pvt) Ltd, a contract publishing house based in Noida, a satellite town of New Delhi, India, the National Capital.

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