Getting clearances only a part of improving investment climate

Written by Kirtika Suneja | Updated: Dec 24 2013, 06:16am hrs
Sidharth Birla has taken over as the president of Federation of Indian Chambers of Commerce and Industry (Ficci) at a time when the macro-economic indicators are not showing signs of recovery and investor confidence needs a boost. With a clear focus on generating employment through manufacturing and skills, Birla tells FEs Kirtika Suneja that the investment climate will improve through competitiveness and market access.

What is your agenda on collaborating with the government to fasten the reforms process

Our stress is on manufacturing as it is central to growth and generating employment. We have suggestive measures for all segments. We believe that inclusiveness cant be sustained if it is not backed by growth. Infrastructure development is required to improve competitiveness. This is what we discussed with Prime Minister Manmohan Singh who said that we need to think beyond WTO and look at new trade arrangements like the Trans-Pacific Partnership agreement and increased market access. However, our concern is that despite having market access, it may not be profitable because of uncompetitiveness of infrastructure.

Is infrastructure development not held up by the slow process of environment and forest clearances

Getting clearances is only one part of the growth story to improve the investment climate. Though the impact of environment on development has been an issue, we cant over stress on either of the two. Changing people is not the solution but putting time limits on decisions is. We have taken up these issues at various platforms. Interestingly, the cabinet committee on investment (CCI) is now working on the ground implementation of the decisions it took and we feel that the committee should not be a feature of the government as it reflects a failure of other parts of the system. The CCI is also in the process of institutionalising some of the remedies it made to the clearances process.

On the macroeconomic front, what are the major challenges as far as growth is concerned

We have to hold on to the fiscal deficit as it will control our spending and the way we raise revenue. Moreover, there should be an inclusive spending so that it leads to creation of assets or production of goods. At present, production is suffering. Similarly, inflation, especially food inflation, is another concern. The key here is delivery to market that is to produce more and waste less by looking at the supply side. We need a stable and continued growth of 8-9% for this.

How do you bring back investor confidence

India is weak on starting a new business due to flaws in business-related laws and legislations. Land and electricity will always be a problem but the time for starting a business must be reduced.

What do you expect from the new government as general elections are around the corner

We want to create an enabling environment for investment besides competitive infrastructure, labour and indirect taxation laws. This is because we never get rid of old laws and end up writing new ones. Also, we need to prepare people to take up jobs we create by skilling them appropriately.

The political space is abuzz with Rahul Gandhi vs Narendra Modi and how the Congress and the BJP will take the reforms agenda ahead. How will the outcome of the elections impact you

We do not get into the political agenda but the developmental agenda. There is no great variation on the economic agenda of the two parties and what we need is certainty of policy making.

The urgency on GST should be restored. We need stability and credibility.

What impact do you see of the US Fed tapering

We are better prepared for it but anything can happen as it is a connected world.

However, we need to reduce our dependence on FIIs and deepen our capital markets.