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Chairman

Mr. Ravi Sehgal is the 24th Chairman of EEPC India

The United Nations has dedicated 2019 to raising awareness about languages of indigenous peoples all over the world. India’s Commerce & Industry and Civil Aviation Minister, Mr Suresh Prabhu, on the other hand, has said that he would like to make 2019 ‘A new year for Exports.’ So, as I wish a grand new 2019 to all the committed readers of ie2, hail the recognition of indigenous peoples all over the world by the UN, let me also outline some of the issues that will concern us Indians, both as enlightened citizens and as members of the global trading community aiming to make a bigger mark in 2019.

Within the first few months, India will go into the election mode to constitute the 17th Lok Sabha. It is possible that legislative assembly elections in some states will be held simultaneously. What then would be the challenges that the next Union Government will face when it assumes office? It may be worthwhile to address some of these issues so that we in EEPC India can play a proactive part in this agenda.

December 2018 witnessed the release of two important publications on the ‘future action driven agenda’ by eminent economists based in India and abroad. The first was the former Chief Economic Advisor, Arvind Subramanian’s Of Counsel: The Challenges of the Modi-Jaitley Economy, followed by An Economic Strategy for India penned by 14 economists including big names like Raghuram Rajan, Gita Gopinath, Maitreesh Ghatak, et al.

Both accounts hail the progress that India has made over the last 25 years as well as the work done by the current government. A wide spectrum of issues is covered and a menu on what needs to be done has been laid out – accelerating the GDP growth rate; fiscal issues and its consolidation, particularly on GST; agriculture related issues; financial devolution issues, and trade-related issues, among others. Let me dwell on a couple of issues impacting business and industry:

  • A key factor is spurring growth and for this the need is to undertake reforms that alleviate ‘supply side’ constraints on capacity enhancement and job creation. The objective must be to enable both the industrial and the service sectors to operate on larger scales. Scale is also the key to productivity growth, which, in turn, is essential for India to expand its share of world exports. One key advice is to roll back recent increases in import tariffs along with a renewed commitment to resist protective policies as a good way of signalling this goal. We in EEPC India welcome this suggestion as the ring fencing of the steel sector has cost India considerable opportunities in value-added Make India manufacturing in the engineering space.
  • A thrust on employment. Though the data on employment in India are of both poor quality and controversial, the recent news that 28 million applied for 90,000 low-level railway jobs suggests we are not satisfying the demand for jobs. The strategy for job creation that has been suggested is to create semi-skilled jobs for those currently underemployed or unemployed and those who are seeking to leave low productivity agriculture. This is another area that we are in consonance with and have been taking effective measures to skill our workforce. We have set up one Technology Centre in Bengaluru while the second one is expected to be inaugurated this month in Kolkata. We have also submitted a proposal to the Department of Commerce for a Tech Centre for Jalandhar to serve the MSME sector in segments like Hand Tools, Cutting Tools, Bicycles, Fasteners, etc.
  • The 14 economists also point out the apparent contradiction of both the government and the private sector lacking manpower, while young people sit at home filing applications. The munificence of Pay Commissions and its paradoxical impact on employment growth or lack of it has been sought to be re-strategised through amending the law to allow for multi-year fixed labour contracts, renewable when they end. The intent would be to move more of contract labour into these fixed-term contracts. This is, indeed, an innovative suggestion and we would be happy to engage with the government to look at making employment less unstable but more productive and flexible for the employer.
  • Both publications talk of open trade being a cornerstone of India’s trade policy so that we can become part of the global value chain. While theoretically this is logical, given the spaghetti bowl of regional trade agreements, we need to do a lot of cleaning up on a global scale for the WTO to get back its hallowed place in the realm of international policymaking.

I have, perhaps, already crossed my word limit given to me by my editor, so let me end by wishing all our readers a great year ahead of success, better and healthy living.

 

 

 

 

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