Govt must facilitate, not merely regulate
How has your experience been in the ministry till now?
It has been an immensely challenging experience for me. There is a lot of learning, and our focus is on outcome-driven work. I say it is challenging because since the start of this Government’s tenure, we came with an agenda of development, which is what we are pushing ahead with even now. But the economy had to be immediately given a good push. Many administrative and legislative reforms that were pending had to be addressed. Administratively we had to clear a lot of deadwood and ensure that industries finds it easier to do business in India. Industry stakeholders have their grievances redressed.
What are the new initiatives taken up by this ministry?
Even as we came to power in May 2014, the then Foreign Trade Policy had expired. We had to quickly work and get something new up and running, which was due from April 2014. We had come in May but obviously within a month I couldn’t have prepared a policy framework, even if it was something prepared by the bureaucracy. I couldn’t have immediately cleared a policy. It took us time to rework and finalise it. After a year, the Foreign Trade Policy was announced in April 2015, but we had reasons for the delay. We wanted to do a complete revamp of the policy. We wanted to ensure that trade receives a fresh boost. Therefore the policy took time, but when it came out it brought in a lot of fresh air into the way in which trade and exports had to be viewed.
We were also looking at how the Intellectual Property Regime (IPR) is being run. We wanted a fresh look at it, in terms of how we could recast it better. How do you promote innovation under a particular IPR regime? How is our IPR going to be handled in the country? Was there a policy in place? Therefore, I immediately constituted a think-tank of eminent experts in the field and made them formulate a draft policy document. They held stakeholders meeting, consulted a lot of people and came up with a draft of the policy document that is now at the stage of inter-ministerial consultations. Once that is done it will go to the Cabinet for clearance.
Thirdly, we intervened in the World Trade Organization (WTO) to protect our farmers. What was inherently a sovereign right of India, to protect its farmers by giving them that necessary comfort of minimum support price, was under grave danger at the global trade body. The Prime Minister took a personal interest in ensuring that the interests of the Indian farmers were protected. He ensured that we were we able to wrench it from the WTO. I am very grateful that all the members of WTO unanimously agreed that this peace clause should be for perpetuity until the time WTO came up with a permanent solution. This was also one of the major achievements of our ministry.
How successful has the ‘Make in India’ initiative been?
First of all ‘Make in India’ is not a scheme or a project. It is more an initiative to make sure that the environment for doing business in India favours those who want to do business and bring investment into the country. The environment should be conducive for manufacturing in India. Now why should manufacturing be so important for India? More than 60 percent of India depends on agriculture for its livelihood, and it is disproportionate, considering the contribution of agriculture to our GDP. Certainly there is a lot of underemployment in agriculture.
On the other side, services sector largely served from IT and IT related activities contributes nearly 50 percent to our GDP, but does it does not employ that many people. So essentially there was this big vacuum for those people who are going to come out from agricultural backgrounds and those people who will not be employed by the services sector. Even if you widen the scope of the services sector, it still cannot attract or give jobs to so many people. Therefore, the manufacturing sector is the only one, which can employ such large numbers. Manufacturing had to be given boost because you don’t know how you will create employment for so many people in the country. Also from 2011 the National Manufacturing Policy, states that the contribution from manufacturing should increase from somewhere between 14- 16 percent to 25 percent by 2022.
The policy wants the growth of contribution from manufacturing to GDP. Now how will that happen, unless manufacturing is given a kind of boost? Manufacturing, therefore, needed to be given that cleaning in the sense of removing shackles, to make it easier for people to invest and start doing business here. That is why ‘Make in India’ looks at ways in which we can make this approach to change the mindset. The government has to be a facilitator and not a regulator. ‘Make in India’ as an initiative focused on working together with state governments and ensuring many things obstructing business will have to be removed whether it is stale policy, unnecessary regulations or requirements of licensing.
Tell us about the state-wise ranking system, post ‘Make in India’.
After ‘Make in India’ had been launched, we followed it up with a one-day workshop with various state governments. During this workshop, an action plan was drafted, based on 98 things the states can do to remove hurdles to business. We wanted states to fulfill all those 98 actionable points that had a different deadline. By June, all of them had to be fulfilled. The states have been very positive and cooperative on it. We have been working out a ranking system, based on after all 98 are complete which of the states are going to be appearing far more attractive for investment. That is the ranking this department – Department of Industrial Policy & Promotion [DIPP] - is doing. It is not out yet, but we will soon release the rankings soon. This is the effort that went into ‘Make in India’. After that we are looking at states and trying to rank them; depending on how much easier it will be for investors to set up their business.
The GDP growth has slowed from 7.5 to 7 percent. Is that an area of concern for the Government?
India is still is one of the fastest growing economies in the world. In one-quarter instead of 7.5 percent, it has come down to 7. I also feel the soon after the monsoon, when festival season begins, and a lot of positive engagements will happen, and there can be a rise in demand, then the next quarter’s growth can go back to 7.5 percent or more. That was a quarterly assessment. I still think India will have a very good growth rate.
What measures is the Government taking against the devaluation of the Yuan?
China is a country from where we receive large quantities of imports. Therefore, when the Yuan gets devalued twice in the span of 48 hours, it is a matter of serious concern. To that extent Chinese goods will be cheaper, as they will then find more demand in India and other parts of the world as well. As it is, our balance of payments with China is not in our favour. The deficit is growing and thus it is a matter of concern.
To address this, we have been holding a lot of meetings with various sectors. Sectorally, I am talking about the industry, especially those who perceive the threat or feel the heat. Safeguards began under the WTO rules to stop imports; similarly they can be import duties levied. If there are reasons to believe that dumping is happening in India by subsidies by China for certain goods that can otherwise cost more, we can then bring in anti-dumping duties. There are measures we can put on the course, but for that we are asking the industry to give us data. The industry has already started providing us with it.
After the Prime Minister’s trips to various countries, how much foreign investment has India been able to gain? What is the estimated projection?
There has been a considerable increase in FDI coming from those countries. There has been 47.20 percent increase in FDI inflow equity from eighteen countries which the PM has visited in one year.
One major area of focus for the Government has been in the manufacturing sector. How well has that taken off?
The sector feels that the steps taken by us are making a difference on the ground. People can see it. We have also put up a lot of regulation related information that we need from them online, making their job simpler and hassle-free.