Indian industry, in general, has reacted quite well to the challenges posed by the pandemic and, with the support from the government, has bounced back smartly.
The government played its cards in a very deliberate manner which definitely aided the recovery process while leaving enough dry powder to provide the much-needed boost through the Budget proposals at a later stage.
Subhrakant Panda, managing director, IMFA, who took over as vice-president of industry body Ficci recently, says the Corona-ravaged economy has staged a smart recovery in the second half of the current fiscal and is set for sustained growth in the next fiscal. In an interview with the FE, he also lauds the role of the government in aiding the recovery of the economy and the areas that require improvement. Excerpts:
What are your priorities as Ficci vice-president?
I have been an active member of Ficci for more than two decades now. During this period, I have held several positions such as the first chairman of the then newly-formed Odisha State Council. I also chair the National Manufacturing Committee. Of course, it is a great honour for me to be inducted in to the national leadership of Ficci. I will certainly do my best to follow the direction set by our president, Uday Shankar, and further the cause of the Indian industry and the country as a whole.
We are set to enter into a new fiscal. How do you see the economy growing in 2021-22?
The economy has staged a smart recovery in the second half of FY21 and is now set for a continued momentum going ahead with leading macro indicators suggesting sustained growth. The Budget proposals will also help as it has a strong focus on infrastructure along with relaxed fiscal deficit norms to aid growth. However, the economy will need careful nurturing given that some challenges are to be expected as India and the world move towards greater normalcy.
How would you describe the role of the government during the pandemic time in aiding the recovery of the economy?
The government played its cards in a very deliberate manner which definitely aided the recovery process while leaving enough dry powder to provide the much-needed boost through the Budget proposals at a later stage. The clarion call of the Prime Minister to save lives and livelihoods was exactly what was needed, and the calibrated approach to deal with the health and economic crisis has worked out well.
What are the areas the government need to work now to provide further impetus to the economy?
Indian industry, in general, has reacted quite well to the challenges posed by the pandemic and, with the support from the government, has bounced back smartly. So, it is more of a question of a steady hand to guide the recovery process along. Having said that, certain emergency measures such as the moratorium on IBC proceedings which were put in place at the height of the pandemic are now being removed, but sectors like aviation, tourism and hospitality are still hurting and need hand-holding.
What are the areas the government need to work to improve the ease of doing business?
Taking a cue from the saying, “never let a good crisis go to waste”, the government has initiated several reform measures during the pandemic period with inputs from the industry. It is imperative to reduce compliance touch points through self-certification wherever possible along with digitisation of records which can be uploaded to a portal through a single return. The latter, popularly known as single window system, is being done to facilitate new investments and should be extended to existing industries as well.
The government has proposed over a trillion-dollar investment in the infrastructure sector. What are the steps required to achieve the target?
This is indeed an ambitious target. I am confident that it can be executed with the right focus and attention. The key is to make available low-cost, long- term funds as most projects in the infrastructure sector have a long gestation. In this context, the newly announced Development Finance Institution (DFI) will be of great help. Several high-profile, high-value projects should also continue to be monitored through the PMO’s PRAGATI (Pro-active Governance and Timely Implementation) platform. An area for improvement is contract enforcement which has been a matter for concern.
What is your view on the government’s privatisation drive?
The bold design outlined in the Budget to raise funds through privatisation is welcome; what is noteworthy is that the word “privatisation” is now being used as opposed to “disinvestment”. This conveys the government’s intent to reduce its business footprint in due course and retain only a minimal presence in certain key sectors.
How can more foreign direct investment (FDI) be brought into the country?
India, in itself, is a large market and measures such as the production-linked incentive (PLI) scheme will help in creating global champions. Also, steps being taken to further improve ease of doing business will certainly help in attracting more investments. FDI flows are at record levels and I believe, the spectrum of inflows will also improve with measures like the opening up of the insurance sector.