India Inc has to be as competitive as their counterparts in China and Vietnam to avoid the next big challenge the world will face, CII president R Mukundan said, asking the government to push for reforms to create an enabling environment for industry by focusing on power, infrastructure, labour and land.
“Every year, for the past 25 years, the CII president says it’s a challenging time. It has not changed. The only solution for us is to be more competitive than our nearest competitor,” the newly appointed chief of India’s largest trade body said in a wide-ranging interview with The Telegraph.
According to him, there are only two countries — China and Vietnam — which have grown for 25 years consistently over 6 per cent. “We have to be better than them, be visible and a solution to the world,” he said.
To achieve that, the policymakers should continue to focus on reforms. “We have to continue to focus on ease and cost of doing business, and also focus on the speed of doing business, how soon business can be done or a transaction closed,” he said.
Learnings of the crisis
Mukundan stressed that the West Asia crisis demonstrated the critical role of small and medium enterprises in the value chain. “You (large companies) can be impacted by the smallest of vendors — value may be minuscule; we have to make them resilient and competitive,” Mukundan, who is also the CEO of Tata Chemicals, observed.
The disruption in the flow of oil and gas through the Strait of Hormuz also amplified the need to double down on internal resources. “We have to rely on resources that exist in India or at least source from friendly countries nearby. Which means a lot more exploration and resource mining because it is the foundation of every other cost structure,” he said, pointing out that India remained underexplored.
Land, land, land
CII has proposed two sets of solutions, one for large corporates and the other for MSMEs. While big firms needed a bigger plot than before as the scale of operations expanded manifold, the ask for smaller firms is separate. Let them repurpose existing land by giving more floor space index (FSI), allowing them to expand rather than moving to a new place, which is inconvenient, he said.
Drawing a lesson from the success of the GST Council, CII has proposed a land council with participation from the state and the Centre to agree on certain ground rules.
FDI formula
Ease, cost and speed of doing business will improve our ability to attract FDI, Mukundan said, arguing that it would depend on three things: “Make the life of existing MNCs easy, make the expansion of existing MNCs easy, make the entry of new MNCs easy,” he said.
The CII president pitched that about 100 top companies of the world needed to be targeted. “We have to reach out to them, provide concierge service — appoint somebody who can get things done and delivered for them — some states have done it, like Tamil Nadu and Gujarat,” he pointed out.
Bengal roadmap
The CII president suggested that the state must work on safety and infrastructure to reap the dividends of a rich talent pool and geographical advantage. “If the area is safe, investment will go. It has happened in Uttar Pradesh, focus on law, order and safety changed the image. And also the focus on infrastructure,” Mukundan signed off.