Deccan Despatch (January - April 2010) - CII

Leadership – Making the Difference24No development possible without buildinga competitive societyMr Venu Srinivasan President, Confederation of Indian Industry andChairman & Managing Director, TVS Motor Company Ltd, says agricultureand factory reforms are areas that have been neglected ever since economicreforms began in India.It was the Chinese example Mr VenuSrinivasan President, Confederationof Indian Industry and Chairman& Managing Director, TVS MotorCompany Ltd, used, to drive home thepoint about competition and the needfor India to buck up. Setting the tone atthe inaugural of the TIDES LeadershipSummit in Coimbatore, he said: “Chinais desperate to catch up and there aremore students learning English in Chinathan we have in India today. The numberof people who go for secondary andtertiary education is larger in China.”According to him, the Chinese had set upa new technical university that cateredto more than 25000 students, morethan all the IITs put together, and hadprofessors from Columbia University andMassachusetts Institute of Technologyteaching. “We may be better than whatwe were but we have to look at what is leftto be done to get a competitive society.If you look at building a competitivesociety, you also look at balancing thecountry’s budget.”Likening the balancing of the country’sbudget to balancing household incomeor a company’s profit and loss account,Mr Srinivasan asked, “Do we have abalance between what we spend onpersonal welfare and what we spendon infrastructure? We are not spendingenough on our infrastructure, and notenough on the social sector in termsof delivery mechanisms.” Referring tohealth and education as critical sectors,he spoke about schools without teachersand medical centres without first aid orparamedics.“We cannot ignore in the long-term thatevery society is competing with anothersociety,” Mr Srinivasan said, giving theexample of India and China presentlyand Rome and Europe in the past. Hestressed that India would have to jockeyfor space in an economic war and createits own space. “Today, China occupiesthe manufacturing space in the world. IfIndia has to create greater employmentand 100 million jobs, we need to focus onhow do we build a competitive society,where we get a greater share of the globaltrade.”Mr Srinivasan pointed to two areasthat have remained neglected sincethe economic reforms (early 1990s) –agriculture and factory reforms. “Forwhatever jingoistic political reason”,agriculture retail was not open tointernational investment, he said, adding,“We are not exporting high-value crops;there is no extension service.” Ruing thelack of proper storage, procurement andquality checks, he was convinced that allthat would happen only if foreign foodprocessors and retailers were allowed tooperate. He was for getting the mandis(wholesale markets) opened up sothat people could buy directly withoutgoing to wholesalers who controlledthe markets and gave the farmers a rawdeal. He reminded the audience that 60percent of the work force in India wasstill directly or indirectly dependent onthe rural economy.Regarding factory reforms, Mr Srinivasansaid no reforms were initiated sincethe liberalisation of the economy in theearly 1990s, which allowed foreign directinvestment (FDI) and removed industriallicensing, allowing people to make whatthey wanted and to compete in themarket place. “India can grow to 12, 13or 14 percent if factories are managed ina rational manner,” he said, and referredto the Factories and Establishment Actof 1900 vintage. “We don’t need so manyacts; no need for multiple inspectors.There has to be some flexibility forlabour; not large-scale hire and fire,”he added. If 100 million jobs were to becreated in the coming five years, he wasin no doubt that it could be done only byproviding inclusive growth and equitableopportunity.