650+ application with $6bn investment approved under PLI scheme
Privatization along with asset monetization will help trigger investment cycle, unlock economic potential and bring private sector to the forefront, Tuhin Kanta Pandey, Secretary, Department of Investment and Public Asset Management (DIPAM), has told the Indian industry leaders.
“In the context of macroeconomic stability, we need investments in infrastructure, manufacturing activity, agriculture, human capital, health, education and skills,” Pandey said on 9 Dec 2022 in his address at the Key Session on ‘Reforms: What Next? of the Global Economic Policy Summit 2022’.
To ensure investments cycle back, it is crucial to ensure macroeconomic stability by being mindful of fiscal deficit as well as current account deficit, he told delegates at the CII organized summit.
While focusing on CapEx is imperative, it is equally important to enhance competitiveness and productivity, he stressed.
Elucidating on divestment which encompasses handing over responsibility to private sector, Pandey said, “The private sector should be able to raise productivity to get better value for money from the same investments. This is the key. And the examples of successful disinvestments such as Air India and Neelachal Ispat Nigam Ltd have shown us a turnaround.”
While elaborating on the role of asset monetization, Pandey highlighted, “It helps trigger investment cycle, unlock economic potential and bring private sector to the forefront.”
The Secretary mentioned that going forward the major driver of growth is sustainably investing in infrastructure to ensure viability, raising productivity and improving infrastructure along with the Government stepping up investments in important social sectors.
He also underlined that there is policy focus on divesting land by way of amendments to the Stamp Duty Act and Income Tax Act to ease demerger.
Further, privatization and Mergers & Acquisition of organizations like IDBI Bank and Shipping Corporation of India are also underway.
“The PM Gati Shakti program and the National Logistics Policy has enabled us to aggregate 2,000 data layers on a single portal for integrated holistic planning,” said Sumita Dawra, Special Secretary (Logistics), Department for Promotion of Industry and Internal Trade.
“This is the prism through which all the projects are being planned and operational projects are being evaluated to identify critical infrastructure gaps.”
Addressing the Summit, she further added that the focus is not just on relaxing regulatory barriers but also bringing better governance outcomes for industry and citizens.
Elaborating on the reforms, she mentioned that PLI Scheme for 14 sectors has started reaping benefits with more than 650 applications approved and reported investment of US$6 billion in the first year which exceeds the target by 106%.
Sectors such as bulk drugs and white goods, food processing and electronics, have seen production, investment and employment generation, said Dawra.
Further, the FDI Policy has been liberalized for sectors like defense, digital media, coal, and telecom, helping attract US$84 billion FDI last year and the target is to go beyond and attract US$100 billion, she underlined.
She mentioned that an Empowered Group of Secretaries has been set up under the Cabinet Secretary to resolve Centre-State issues pertaining to EoDB.
Dawra also mentioned that the National Single Window System (NSWS), which was launched last year, has already processed 245 clearances and is being used as a diagnostic tool.
Further, 37,000 compliances have been reduced with a view to ease doing business for the industry.
Other initiatives like BRAP, India Industrial Land Bank and Industrial Park Rating System have also played an important role in improving the business climate.
Dr V Anantha Nageswaran, Chief Economic Adviser, advocated for divestment from a different kind of LIC: Licencing, Inspection and Compliance regime, which is now happening substantially at the Union Government level, but it needs to percolate down to the lower levels of the local and state governments as well with a focus on MSMEs.
Public sector infrastructure projects have seen increase in investments from Rs.6.8 lakh crores in 2011-12 to about Rs.21.2 lakh crore over last 10 years, he pointed out.
While the public sector has helped scale up investment in the last decade, going forward the private sector must not be crowded out and it must play a greater role while ensuring that combined investment spending by private and public sector should not drive cost of capital too much for the economy.
Dr Nageswaran also elucidated on the importance of Centre-State coordination, focusing on tertiary education, developing multidisciplinary skills, and making sure that MSME suppliers are paid on time.
He encouraged the industry to collaborate with the government for inculcating a trust-based approach to ease the compliance burden.
There are five key areas which need to be prioritized for achieving sustainable levels of growth for its economy and industry in the post-pandemic world, added Sanjiv Bajaj, President, Confederation of Indian Industry (CII) and Chairman and Managing Director, Bajaj Finserv Limited.
“These include, employment generation, manufacturing competitiveness, fiscal consolidation, technology and climate change and sustainability, among others,” he said. fiinews.com
