Presented by

Harshad More
© Confederation of Indian Industry
 About CII
Works to create and sustain an environment conducive to the
growth of industry in India, partnering industry and government
alike through advisory and consultative processes.

Founded 114 years ago, a non-government, not-for-profit, industry

led and industry managed organization.

Direct membership of over 7800 organizations from the private as

well as public sectors, including SMEs and MNCs.
Creates a conducive, enabling climate for Indian businesses to
pursue sustainability goals.

With 64 offices and 7 Centre's of Excellence in India, and 7

overseas in Australia, China, France, Singapore, South Africa, UK,
and USA, and institutional partnerships with 223 counterpart
organizations in 90 countries, CII serves as a reference point for
Indian industry and the international business community.

Confederation of Indian Industry ' services includes and covers –

WTO, TQM, TPM, Technology & IPR. SME, Skills Initiative, Library,
Invest India Services, Intellectual Property Rights (IPRs),Information
Risk Management, Green Business,
© Confederation of IndianExports,
Industry Environment
 CII Estimates GDP Growth at 8.0 – 8.5% in
2010-11
• India has weathered the global economic crisis better than
other countries – EIU.
• India considered an emerging economic superpower and
part of G20.
2008-09 2009-10 2010-11 E
Agriculture 1.6 -0.2 2.0 – 3.5
Industry 3.9 8.2 8.5 – 9.0
Services 9.8 8.7 9.3 – 9.5
GDP 6.7 7.2 8.0 – 8.5

• Rainfall during 2009 was significantly deficient at 23% led

to decline in agricultural production
• A recovery in agriculture likely in the coming year leading
to upside in GDP growth; Industry and services to remain
strong as capacity expansions take place to take
advantage of rising demand
3 Source: CSO, CII Research
© Confederation of Indian Industry
 India’s economic outlook remains very
robust…
GDP expected to grow
India projected to be
at
#3 largest economy by
~ 8% to reach ~$2T by
2050
2016
India real GDP (at 2009 prices) * “India has the
2050 GDP potential to grow
$2T $50T
fastest over the
$1.8T 44 next 30-50 yrs…if
development
40
35 proceeds
2
successfully”
30 28
$1.2T

1 20

8%
CAGR 10
1
0
China US India

0 Current 3 1 10
2009 2015 rank
(estimate)

Calendar year; Exchange rate: INR50= USD1

Source: Euromonitor; EIU; Goldman Sachs
4 (BRIC report)
© Confederation of Indian Industry
 However we face Significant Challenges

• Global developments: Developments in EU-Greece

highlight the fact that global conditions will remain
volatile for some time; excessive dependence on foreign
capital inflows is not recommended for India

• Exchange rate: Currency fluctuations being driven by

external conditions will have an impact on the real sector;
important role for RBI in preventing excessive volatility

• Trade prospects: Improving with stabilisation in the

global economy but growth in developed economies will
remain weak in the near term; need to diversify markets

• Inflation: urgent need to get inflation under control;

monetary policy cannot be the only instrument when the
drivers food, fuel and commodities.

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© Confederation of Indian Industry
 However we face many significant
challenges
Current Future
• High Poverty rates:
- Unacceptable poverty
(37%1)
- 456M2 people live on
<$1.25/day
• Widening “job gap” in
next 5 years:
• Low literacy rates 17M job gap-
 ~70% of population- ~94M new people will
among the lowest in the seek jobs but only
emerging markets* 77M new jobs will be
created
• Corruption & red-tapism
Ranked #84 out of 180
countries on corruption
index

Source: 1(% of total population) Expert Group on Methodology for Estimation of Poverty - chaired by Prof. Suresh D. Tendulkar, 2010
2
2005 PPP adjusted figure based on “World Bank poverty estimate for developing world” (2008);
*China and Brazil >90% (% of pop. aged 15+)- Euromonitor
^ Transparency International- India scored 3.4/10 where highest was 9.4 (New Zealand)

6 © Confederation of Indian Industry

Two biggest sources of employment in our
economy are agriculture & private sector
Em ploym entby location& sector (M); FY 2007
402 402 201
100%
Others Public
Urban Construction
80 (29%) Services

Manufacturing
60 Trade, hotel,
restaurant
Private
40 Rural
(71%)
Agriculture
20

Note: *Excludes unorganized workers in the organized sector; ^consists of those in the working age group (15-59) actively seeking employment;
1
includes community, social and personal services; 2 includes mining and quarrying; transport, storage and communication; finance, insurance, real
estate; electricity , water etc
Source: Registrar General of India; NSSO; Indiastat; Labour Bureau of India

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© Confederation of Indian Industry
 Going forward, the private sector will
need to be the primary driver of creating
new jobs
Expectedincrease in numberof jobs
by sector (M); FY 2007-12
125 120
Finance, insurance, real
estate and business services,
100 Transport,storageand
communication
Mining & quarrying
75
58 Elec. gas & water supply

50 Construction

Community,social andpersonal
25 services

Manufacturing
0 Trade,hotel,restaurant
-4
Agriculture
-25
FY 2007-12 FY 2007- 17

Private sector growth needs to increase from projected

9.5% growth to ~12%+ annually to close job gap
Note: Excludes unorganized workers in the organized sector; ^consists of those in the working age group (15-59) actively seeking employment; * includes community, social and personal
services; ^ includes mining and quarrying; transport, storage and communication; finance, insurance, real estate; electricity , water etc
Source: Registrar General of India; NSSO; Indiastat; Labour Bureau of India
8
© Confederation of Indian Industry
 Four key enablers for faster sustainable
growth – over the medium term
Qualified
1 talent
Education pool
2
Employability

Sustainable Create jobs &

enterprise livelihoods
3
Innovation
4Entrepreneur
Effective
-ship business
practices

CII Theme 2010-11: Business for livelihood

“Businesses are part of civil society”
“Creating jobs is the best CSR activity”
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© Confederation of Indian Industry
 How do we achieve this vision?

We need to aim for sustained 10% GDP

growth

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© Confederation of Indian Industry
 Vision 2010-11

Business for livelihood

(Education & Employability, Innovation & Entrepreneurship)

Agriculture Manufacturing Services Infrastructure

• Art, sports & literature • Education & skills

• Healthcare • Corporate governance
imperatives
Social and
Corporate

• Inclusive society & • Entrepreneurship, innovation

affirmative action & competitiveness
• Economic policy, reforms, • Trade & globalization
governance &
implementation
• Energy, water & climate
change
11 • Urbanization & future cities
© Confederation of Indian Industry
 Ten Point Agenda for 10% Growth
1. Agriculture needs to grow at a sustained rate of 4%
2. Manufacturing needs to register 11-12% long term average
growth
3. Service sector needs to remain robust and a growth driver
4. Physical Infrastructure needs to be of global standards
5. Education would have to be the centre of reforms
6. Skill development would need a massive step up
7. Labour environment and rules need to be conducive to
employment creation
8. Delivery mechanisms of Government need to be streamlined
9. Need New Urban Centres to come up as growth poles
10. The financial sector reforms need to be fast tracked to
enable financing of a high growth, large economy –
particularly focusing on long term funding instruments and
Financial Inclusion
Aim is to Achieve a Sustainable and Inclusive 10% Growth
by 2014
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© Confederation of Indian Industry
 1. Achieving 4% Sustained Agriculture
Growth
Virtual stagnation in Agriculture due to
• Poor infrastructure
• Collapse of Agricultural Extension System
• Decline in public investment in agriculture/
irrigation
• Fragmentation of land holdings
To do:
• Raise farm productivity by improving quality of inputs
• Better Supply Chain Management
• Improving Market linkages
• Optimal and Sustainable use of available land
• Right Pricing of Power and Water

CII initiatives
•Special Task Forces constituted to address issues related to
agriculture
•Special Task Force on Monsoons
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© Confederation of Indian Industry
 2. Achieving 11-12% Long Term Manufacturing
Growth
• Need an Enabling Manufacturing Policy to include
Proposed NMIZ
– Simpler clearances and approval mechanism
– Encouragement to Green Manufacturing
Policy
Technologies addresses
– Appropriate Infrastructure these issues,
– Flexible labour rules without diluting social therefore,
security net needs quick
– Easier exit policy
enactment
• Every additional 1%
growth in
• Friendly tax system – GST and a well considered
DTC manufacturing
creates 20-30
• FTAs and CECA/CEPAs to be entered into with care
and consideration million additional
jobs
• Government support needed for Technology
infusion, development and upgradation in select
sectors • Need to develop
strengths in labour-
• Land Acquisition and R&R Laws to be in keeping
with requirement of industrialization intensive sectors
such as textiles,
consumer
electronics,
furniture and
• CII working with DIPP on New Manufacturing Policy
industrial machinery
• 2010-11 would see a huge thrust to the Cluster programme of CII
• CII would release a white paper on Land Acquisition and R&R
• CII would set up a VLFM Institute
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© Confederation of Indian Industry
 3. Taking Services to the Next Level

Key policy changes required in services sector include

‾ Enhanced FDI participation in select areas of services
‾ Set up a National Services Competitiveness Council
‾ Iron out Centre-state issues in the services sector
‾ Improve the viability of the informal sector in services
‾ Rationalise taxation issues in the sector

• CII Initiatives in the services sector include

– Developing Public Private Partnership model in healthcare space with Planning Commission
– Policy dialogue with Planning Commission for a comprehensive retail policy
– Dialogue with the Ministry of Tourism for upgrading skills of the manpower required in the Tourism
& Hospitality Sector for the Commonwealth games.
– CII to facilitate Policy dialogues on Roadmap for accelerating growth of broadband in India to reach
695 million users by 2014
– Facilitating policy dialogues for Broadcast Regulation and Distribution platforms

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© Confederation of Indian Industry
 4. Creating world class infrastructure

• Roads and highways: Improve dispute resolution mechanism

for road development
• Power sector: Push distribution reforms in the power sector
through privatisation of large discoms, reduction in AT&C
losses and peak load management
• Civil Aviation: Timely policy intervention for settling the
issues regarding airport infrastructure; provision of space
for establishment of MRO facilities; and, rationalization of
high sales tax on ATF
• Ports & Shipping: Corporatise major ports and improve port
evacuation facilities for improving port connectivity

• A CII-MoRTH Joint Task Force created to identify issues

of concern in the roads sector and suggest solutions
• CII National Committee on Civil Aviation consulting with
Airports Economic Regulatory Authority

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© Confederation of Indian Industry
 Education (primary and secondary) delivery
system needs significant improvement
High drop out rates throughout schooling
100
100%
80
-26
60
40 -24 38
-12
20
0
Initial Class Class Class High
enrolment I-V VI-VII IX-X school

Poor quality of delivery – stagnation/decline in learning &

comprehension
• Teacher to student ratio of 1:60 at primary level
• Only half of 5th standard students can read 2nd standard text in
2008
• Only 28% across grades could do simple division sums in 2008
Source: Annual report, Department of School Education & Literacy; Forbes India Budget 2010 analysis; Annual Status of Education Report
(Rural) 2008

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© Confederation of Indian Industry
 Education (tertiary): Gross enrolment
rates are very low vs. other countries
GER in tertiary institutions is considerably lesser than other
countries
Gross enrolmentratio in tertiary education(2007)
100%
82
80 76
59
60

40 30
23
20 12
0
USA Norway UK Brazil China India
(2006)

Govt of India aspires to achieve 30% enrolment in tertiary

education by 2020
Gross Enrolment Ratio= (number of students enrolled in a level of education regardless of age)/ (population of official school age for that
level)
Source: UIS data center; UNESCO Institute for Statistics; Department of Higher Education; Lit search

18 © Confederation of Indian Industry

 5. Education – The Big Agenda
Objective
To create the intellectual infrastructure and knowledge
workers needed to sustain high growth trajectory in a
competitive global environment

CII Policy Initiatives

- Policy Advocacy to make teaching an attractive professional
proposition by addressing remuneration issues. Retaining
talent in the teaching profession
- Developing practical modules to encourage private
investment in the education sector
- Support for foreign universities coming to India (Foreign
Educational Institution-Entry and Regulation Bill 2010)
- Public-Private-Partnership in developing industry oriented
curriculum and developing industry role in accreditation and
rating of institutions
CII, in partnership with GoI will establish 30 Industry-Academia
Innovation Centres across the country – one in each state

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© Confederation of Indian Industry
Improving employability is an urgent need

Inadequate vocational …leads to an employability

training… crisis
Proportionof vocationally • ~53% of employed youth suffer
trainedlabour force (Aged 20-24 yrs) from skill deprivation1
100% 96
• Barely 10-15% non-engineering
78 80 graduates are employable1
80 75
68
• Only ~25% engineering graduates1
60
considered directly employable;
e.g., Infosys’ annual training
40 budget is ~Rs 750 Cr2
28
20
5
0
Source: International Labor Organization; World Bank – Human Development Report, 2006; CLSA, March 2008; Credit Suisse, December 2007; 11th plan document;

India UK Canada Korea

Planning Commission - task force on employment opportunities, 2001
1 India Labour Report 2007 (http://www.teamlease.com/images/news_image/coverage2009/dec09/Addressing_22dec09_All.jpg)

Mexico Germany Japan

2 http://www.bpowatchindia.com/bpo_news/infosys_spends_rs750_crore_on_training_workforce/august-11-
2008/infosys_spends_rs750_crore_on_training_workforce.html

20 © Confederation of Indian Industry

 6. Stepping up Skill Development
Objective
To make India the skills capital of the world. Develop the skills
needed to support the rapid expansion of manufacturing and
services, and develop a more productive and sophisticated
agriculture sector

CII Policy Initiatives

- CII is working with Universities to develop vocational training
centers. There is already a CII-Delhi University Vocational
training program
- Setting up of new skills centres : Gurgaon with ITE Singapore
and Balasore with IndiaCan
- CII has build sector specific Skills Councils for Agriculture ,
Hospitality, and Automobile in partnership with the EU. Other
such councils are on the anvil
- CII is partnering with Ministry of Rural Development to develop
vocational training in rural areas based on local demand for
skills and provide placement services for the trained workers
Launch of 10 new CII Skill Development Centres

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© Confederation of Indian Industry
 7. Conducive Labour Policy to Create
Employment
Objective
To bring together industry, governments, and labor rights groups
and create a policy environment that supports employment
generation, inclusiveness and productivity enhancement. To
develop best practices in labor management and standards that
meets global benchmarks

CII Policy Initiatives

- CII is working closely with government for the simplification and
rationalization of labor laws
- CII is developing best practices and practical modules for contract
labor keeping in mind the objectives of livelihood sustainability
- CII is working with industry and other stakeholders on occupational
safety and is an active participant in the National Safety Council
- CII is closely involved in the policy formulation process with the
Central Apprenticeship Council and the Central Board for Workers
Education
CII to release White Paper on Labour Regulations

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© Confederation of Indian Industry
 8. Improving Government Delivery
Systems
• Quick implementation of Unique Identification Scheme
• Move to a system of cash transfers or coupons compared to
present system of subsidy in specific items
• Significant improvement possible in case of targeting food
subsidies by moving to food coupons that can be redeemed
against food supplies in any retail outlet
• Greater devolution of power to local governance bodies such as
Panchayats in rural areas and municipalities in urban areas
• Willingness of government bodies to work with private sector for
ensuring better delivery: PPPs in education and health services
are promising
• Set up regular monitoring/ assessment system using special
groups comprising experts, government officials and industry, in
areas where large outlays are made by government

CII Task Force on Technology for Inclusive Development

CII-State Government Monitoring and Implementation Task
Forces
National Sectoral Task Forces (Government / CII) on monitoring
23 and implementation
© Confederation of Indian Industry
 9. New Urban Centres as Growth Poles
• Structural challenges driven by nature of urbanization in India
i.e. unprecedented scale, high density cities and
predominantly Brownfield
• Policy limitations – private participation and Urban Local
Bodies functioning with poor execution capabilities
• Administrative problems – Municipalities are overburdened
resulting in poor levels of service delivery
• To overcome these problems, need to give increased power to ULBs through
ensuring their financial independence and viability
• Need to implement 74th Constitutional amendment
• Enhance execution capabilities by devolution of operational and financial
power to local bodies
• Encourage PPPs to create ‘Enabling Environment’ at State Level

• CII to facilitate dialogue on Real Estate Regulation Bill

• CII report on “Intelligent Urbanisation – A Roadmap for India”
throws light on how technology has a role in meeting India’s
urbanisation goals

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© Confederation of Indian Industry
 10. Financing High Growth

• Develop Rupee denominated corporate debt

market for raising long-term capital
• Increase access to international debt markets
• Expansion in capital base of banking system
• Greater FDI needed in Insurance and Banking
• Resources currently locked up in financing
government debt needs to be freed

CII is creating New Task Forces on:

-Financial Stability & Development; and
-Financial Inclusion

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© Confederation of Indian Industry
 Small /micro entrepreneurs account for
~50% of jobs, but multiple issues hamper
growth
Self/small scale employment
accounts for large portion of Multiple issues to consider
workforce
People employed • Little or no education, and no
(FY07) vocational training
402 201 201
100% • Access to credit
Public
Regular / casual • Lack of social security
Private
workers
80
>10
• Self-employment for minority
communities (inclusive growth)
60

Private<10
• Corruption, especially at
grassroots
Self employed

40
Agriculture

20
Non-agri employed

Note: Self employed people may or may not be “entrepreneurs”, and may or may not be skilled
26 0 © Confederation of Indian Industry
 Innovation

 Need to develop India specific Innovation Ecosystem Model for

meeting challenges unique to India’s context
 A Public funded – privately managed endowment needs to be
created, which would address the early stage finance
requirement of innovation
 Favourable Policies and Incentives to increase Industry’s
investment in Innovation (R&D/Design/IPR) from current level
of 0.2% of GDP to 1% of GDP in next five years through
Industry-Academia/R&D institutions-Government Partnership

CII, in partnership with Ministry of Science and Technology, will establish

“Global Innovation and Technology Alliance (GITA)” to implement
Government’s Technology and Innovation Initiatives – national and
international

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© Confederation of Indian Industry
 Inclusiveness and Affirmative Action

 Indian Industry shares the nation’s resolve to address

the deprivation suffered by the SC/ST communities and
commits to stepping up its Affirmative Action agenda
in the years to come to ensure that India becomes a
land of equal opportunity
 CII has developed a voluntary Code of Conduct for
members to implement positive discrimination
 CII would take the success stories among its members
in the area of affirmative action across the country to
encourage similar initiatives in other firms.
CII has created a Affirmative Action Fund with industry
contributions to finance affirmative action activities in the
private sector
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© Confederation of Indian Industry
 Corporate Governance

Key Issues

• Inadequate number of qualified / competent independent

directors
• Unutilized whistle blowing mechanisms

Focus Areas for CII

• Directors Training & Orientation

• Directors’ Liability Issues
• Effective whistle blowing methods

Proactive advocacy for adoption of CII Voluntary

Recommendations on Corporate Governance

29
© Confederation of Indian Industry
 Trade and Globalization

CII Goals
 Double India’s goods and services exports by 2014 from current
levels, double India’s share in world exports by 2020
 Substantially expand industry linkages in global production chain
and access global market through strategic acquisitions and joint
ventures abroad

CII Policy
 Develop a dedicated commercial intelligence mechanism for
Indian industry
 Focus on capacity building on quality accreditation, export cycle
management and logistics to make Indian industry more
competitive
 Engage with government to ensure trade agreements have
positive outcomes for industry and are equipped to deal with
30
industry concerns on emerging
© Confederation trade
of Indian issues like non-tariff
Industry
 Global Engagement

• 30 Overseas Business Delegations to key countries (China,

Japan, S Korea, UK, USA, Germany, France)
• 15 Planned meetings with Heads of State (South Africa, Russia,
France, UK, Japan, S Korea, Canada)
• CEOs Forums with countries of strategic interest (14 new
Countries identified – focus on emerging economies)
• Regional Conclaves in emerging markets of LAC, Africa, CIS
• Strategic dialogues – Track – II with China
• Business Summits – ASEAN, EU, IBSA, Pakistan

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© Confederation of Indian Industry
© Confederation of Indian Industry