Centre-state bodies like the GST Council may be set up for critical reform areas such as agriculture, power, land, education, and health to build a nationwide consensus, new CII President R Mukundan told Prasanta Sahu. He stressed the need for a renewed focus on factor market reforms. Edited excerpts:
In the power sector, the emphasis is on strengthening transmission and distribution while attracting greater investment into renewable energy and the broader energy transition.
While significant infrastructure development has taken place, bottlenecks remain in multimodal transportation and last-mile connectivity. Our factory door to the ship should not be more than 24 hours. Reducing logistics costs and transit times is critical for improving India’s competitiveness.
Labour codes have already been introduced, but implementation at the state level remains essential. Land availability also remains a challenge for manufacturing, requiring larger industrial land banks and simpler allocation processes. edited excerpts.
Q. Given frequent global disruptions, how can India sustain high economic growth while creating enough jobs for its youth?
The current global uncertainty should be viewed not merely as a challenge but as a significant opportunity for India. The focus should not be restricted to maintaining a growth rate of 6.5-7%, but on identifying reforms that can help India move closer to 9-10% growth over the medium term.
The government and industry have been working closely on a reform agenda focused not only on boosting economic growth but also on ensuring that the benefits reach ordinary citizens. This includes addressing employment generation, entrepreneurship, agricultural stress and opportunities for young people entering the workforce.
Q. What are the key foundational reforms required to accelerate growth?
Foundational reforms begin with improving the business environment. While India has made considerable progress on ease of doing business, the next stage is to focus on the speed of doing business. What takes weeks must take days; what takes months must take weeks. The objective is to eliminate lengthy approval processes and leverage digitalisation for faster decision-making.
India has the world’s second-largest arable land area and tremendous potential to improve productivity and exports.
The geopolitical environment has highlighted the need to increase exploration of critical minerals, crude oil and energy resources. Greater focus on both onshore and offshore exploration is essential.
Q. What are the major factor reforms needed?
In the power sector, the emphasis is on strengthening transmission and distribution while attracting greater investment into renewable energy and the broader energy transition.
While significant infrastructure development has taken place, bottlenecks remain in multimodal transportation and last-mile connectivity. Our factory door to the ship should not be more than 24 hours. Reducing logistics costs and transit times is critical for improving India’s competitiveness.
Labour codes have already been introduced, but implementation at the state level remains essential. Land availability also remains a challenge for manufacturing, requiring larger industrial land banks and simpler allocation processes.
Q. What future-ready reforms does India need?
The priority is increasing investment in technology and research and development. Industry and government must work together to promote innovation and develop globally competitive products.
Climate change and sustainability are another major focus. India must strengthen adaptation strategies to address rising temperatures, water stress and other climate-related challenges.
There is also a proposal to establish GST Council-like mechanisms in areas under concurrent jurisdiction to improve Centre-state coordination. Such councils could be considered for critical reform areas like agriculture, power, land, education and health to build a nationwide consensus on reforms.
Q. What role do fiscal, monetary and policy reforms play?
Fiscal consolidation remains an important objective, and the government is viewed as being committed to that path. Monetary policy must continue to support price stability while maintaining financial stability.
Additional reforms are needed to attract greater FDI, increase exports and deepen India’s integration with global markets. A key recommendation is to move from “FTA to FTU”—from signing Free Trade Agreements to ensuring Free Trade Utilisation.
The Production Linked Incentive (PLI) scheme is also considered an important tool for attracting investment and building manufacturing scale.
Q. What impact has the PLI scheme had on manufacturing?
The PLI scheme is regarded as a major success, particularly in electronics and semiconductors. It has attracted large-scale investments and demonstrated that targeted incentives can significantly reduce investor risk. Investments generated in some sectors have been many times higher than the incentives provided.
India should have PLI 2.0. CII has suggested extending the scheme to sectors such as aerospace, defence, chemicals, furniture, hand and power tools, leather and footwear, machine tools and toys, where India has substantial growth potential.
Q. How can India strengthen technology and manufacturing capabilities?
Government-backed initiatives such as the Anusandhan National Research Foundation and the Research, Development and Innovation Fund should continue supporting innovation and startups. Second, India should actively pursue global technology partnerships. Third, stronger collaboration between academia and industry is essential.
Critical minerals, pharmaceutical APIs, semiconductors and chemicals have been identified as priority areas for future R&D efforts.
India has already made rapid progress in sectors such as electronics, but the next stage requires building domestic ecosystems for intermediate goods, chemicals, battery storage and critical components. The challenge is not just setting up assembly operations but creating entire value chains.
Despite geopolitical uncertainties, businesses are adapting quickly. Indian exporters have diversified into new markets during disruptions, while reconstruction efforts in West Asia could create significant opportunities for Indian companies. India should continue promoting Brand India, attract foreign capital and technology, and leverage global disruptions as opportunities for long-term growth.