Prime Minister Narendra Modi today asked the industry to take risks and step up investments especially in job-creating sectors as his government looks to perk the economy by boosting spending and attracting global capital with improving ease of doing business.
A meeting of the industry and business leaders, bankers and economists called by the Prime Minister to discuss how to convert the global turmoil into an opportunity felt that its impact on India would be far less while India Inc favoured an interest rate cut to bringing down cost of funds.
In a nutshell, the participants at the three-hour long meeting analysed the recent global events, their impact on India and the opportunities in-built in the situation for India, Finance Minister Arun Jaitley told reporters after the interaction.
He said the participants, 27 of whom spoke, felt the global situation, especially the volatility in the capital and currency markets, is a transient phase and that steps should be taken to strengthen the real economy.
Prime Minister laid thrust on low cost manufacturing and felt the strength of economy lies in its huge human resource, size of domestic market and that it is not entire export dependent.
He also laid emphasis on small and medium enterprises sector and using MNERGA funds as a possible tool for skill development and using MUDRA (rpt) MUDRA Bank for supporting unorganised sector, Jaitley said. Transparency in governance will lead to early decisions.
Reliance Industries Chairman Mukesh Ambani, Tata Group head Cyrus P Mistry, Aditya Birla Group head Kumar Mangalam Birla, Sunil Bharti Mittal of Bharti Airtel and ITC chief Y C Deveshwar were among the industry leaders who attended the meeting.
RBI Governor Raghuram Rajan, ICICI Bank CEO Chanda Kochhar and SBI Chairman Arundhati Bhattacharya and economists like Subir Gokaran and Chief Economic Advisor Arvind Subramanian as well as Niti Aayog vice chairman Arvind Panagriya were also present.
Former Sebi chairman G N Bajpai said the Prime Minister asked the industry to encash the opportunity available to it and leverage the infrastructure system.
On the other hand, he said, India Inc suggested various steps for improving the economy and ease of doing business.
According to Mazumder, the main issues discussed during the meeting were slowdown in China, how to convert the present global situation into an opportunity, ease of doing business and ways to boost agriculture.
"China was discussed. On how it should be tackled and whether its an opportunity for us. But Prime Minister did say that somebody's pain should not be our gain. So we should look at it as an opportunity and we should move forward on that," he said.
The CII President said it was "acknowledged that on Ease of Doing Business we have not reached there 100 per cent but we have made some progress in that".
Ficci's Suri said the talks centred on how to push domestic investments, boosting infrastructure, skill development, promotion of start-ups and lowering the cost of capital to boost investments.
"We have requested that cost of capital be reduced, infrastructure development be expedited and tax incentives be provided to budding entrepreneurs," Suri said.
However, both Suri and Mazumder said the government's decision to allow an ordinance that eased land acquisition rules to lapse was not discussed.
"Improving flow of credit, derisking and de-stressing public sector balance sheets, improving overall lendable resource of the banking system, innovation and entrepreneurship are the major areas on which PM is emphasising frequently," Kapoor said.
The others who attended the meeting were state-owned gas utility GAIL India Chairman B C Tripathi, BHEL chief B Prasad Rao, ICICI Bank CEO Chanda Kochhar and SBI Chairman Arundhati Bhattacharya.
Ajit Ranade, Chief Economist, Aditya Birla Group, Jahangir Aziz, Chief Economic, JP Morgan and Subir Gokarn of Brookings Institute were among the economists/experts present at the meeting.
Government officials present the meeting included Finance Secretary Ratan P Watal, Commerce Secretary Rita Teaotia, Economic Affairs Secretary Shaktikanta Das and Chief Economic Advisor Arvind Subramanian as well as Niti Aayog vice chairman Arvind Panagriya.
The meeting was held at a time when global markets are in turmoil caused by a slowing Chinese economy, devaluation of the yuan and concerns surrounding the prospect of a US rate hike.