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75th Annual General Meeting
December 13, 2002, New Delhi
Address by Mr Rajendra S Lodha, President,
FICCI
Respected Pradhan Mantri ji,
Your Excellencies
Senior Political Leaders and Government Officials
Our Distinguished Patrons Dr. K.K. Birla and Dr Charat Ram,
Ladies and Gentlemen,
It is with an immense sense of humility that I stand before
you today, on a proud and historic occasion for FICCI as we
celebrate our Platinum Jubilee -- 75 years of a Quest for
Excellence for India. A quest that began its journey seven
and a half decades ago, with an anguished voice that called
for the right to be heard as an Indian, a voice that called
for freedom to live as an Indian, and a voice determined to
achieve our dreams as free Indians.
Ladies and Gentlemen, FICCI is not merely the apex chamber,
it was born on the inspiration of Mahatma Gandhi as a child
of India’s Freedom Movement, when there was none to talk
of indigenous Indian Business, none to promote Indian Industry
and very few like FICCI’s founding fathers who could
stand up to the might of the powers that governed the nation
then. FICCI gave shape to a National Dream to shape a new
modern and self-reliant India, capable of taking on the best
through individual excellence and collective endeavour. There
was a day when several of the ancestors of the leaders present
in this hall, were not allowed to enter the exalted portals
of business organizations because they were Indians. We were
proud, then, to be indomitable Indians – we are proud
today, on our 75th year, that FICCI still embodies that spirit
of freedom, of assertion of self-respect and of nationalism.
It is a matter of immense pride that to share this moment
of history we have with us today, the Honourable Prime Minister
of India, Shri Atal Bihari Vajpayee ji, the atal unchangeable
icon of nationalism.
We are honoured, Prime Minister Sir, for your gracing this
Platinum Jubilee Annual Session, and we would like to convey
our deepest gratitude to you for the continuous encouragement
that you, personally, and your Government have given to FICCI.
Inspired by your vision this year FICCI worked actively in
a spirit of partnership with Government and organised 15 joint
programmes on matters and issues of national importance -
be it on R&D, Energy Conservation, Agriculture, Rural
Development and Jal Swaraj or the India-Asean Business Summit
- we worked together to a common goal of unleashing a New
India. Today, on the occasion of our 75th AGM, we at FICCI,
renew our pledge to the Nation, that we shall continue to
uphold the spirit of Indian excellence, and strive relentlessly
to achieve prosperity and progress for the people of India.
One year ago, on this very day, India’s symbol of democracy
and freedom – the Indian Parliament – faced a serious
terrorist attack, which was bravely thwarted by our security
forces. Indeed, as we reflect on the year gone by, it would
be rather difficult to ignore the new threat to humanity that
has bared its tentacles globally over the past year, and for
many years before that in India. It is a matter of sadness
that terror has today substituted peace, conflict has replaced
cooperation and the very advancements of science and technology,
that were to make the 21st century an unparalleled paradise,
are now being used against mankind to instill fear, to terrorize
and to destabilize. Whilst we may have shrunk the world into
a global village – created a borderless economic world,
we also talk today of a clash of civilisations, of division
between people and people, not just amongst countries but
within countries as well, and despite the world having spent
billions in firepower we are yet to feel secure. We face today
one of the greatest challenges in recent history, where the
misadventures of a few hold the entire world to ransom. India
stood alone in its fight against terrorism for many years
in the Aekla Chalo Re mode. Today, our concerns stand vindicated
as Nations all over the world unite to face this menace. Indeed,
it is now time for global leadership to work towards a demonstrated
objective not only to wipe out this scourge, but to mend,
to heal, to bond and to build a future for the generations
to come - so that they may live in peace and work towards
global prosperity.
A few years ago, from the ramparts of the Red Fort, you,
Prime Minister, Sir, called for doubling India’s GDP.
We share that dream. What I call for today, Sir, is to transform
that dream into reality.
We have, indeed, commenced our journey - and this is visible
– be it in our attaining food security or keeping inflation
under control, the fact that the country stands tall with
over $66 billion in reserves, the progress made towards attaining
energy security with the recent gas discoveries and investments
in oil fields abroad or the fact that finally our exports
have risen at a rate of 14% between April and October this
year despite a sluggish global market.
In the last few years, India has undergone a silent revolution
of sorts. You gave FICCI the honour by announcing the Golden
Quadrilateral in our 73rd AGM. Significant progress has been
made since then and we keenly await a similar pace and drive
in the case of the North South Corridor and the East West
Corridor apart from the Pradhan Mantri Gram Sadak Yojana,
which will link every village with an all-weather road. In
view of our demonstrated prowess should we not increase our
planned target and outlay on roads by a further 30%?
We have had the highest increase in telecom growth since
independence. More importantly 500,000 of our 600,000 villages
had been connected by 31st July this year. After achieving
self-sufficiency in food, we also exported Rs 6,400 crores
of food grains. Another frontier crossed by your Government
was the dismantling of the Administered Price Mechanism to
foster competition and permit private entities in the field
of marketing in the oil and gas sector. Your new oil and gas
exploration policy offered 70 blocks and thus new and rich
gas fields were discovered. We must recognize the revolutionary
implications of the IRDA Bill, the Patents Act and other important
legislations passed under your stewardship.
We have indeed come a long way. We certainly need to acknowledge
these successes today on FICCI’s 75th year – giant
steps under your leadership and we applaud you on these achievements.
Laudable as this may be we should not become complacent because
our 5 – 6 % growth levels may not be good enough. At
5 %, we cannot really hope to improve the quality of life
of an average Indian, at 7- 8 % we will just begin to make
a difference. The reality is that, to make a real difference
and achieve our vision , we have to grow ideally at over 10%.
True, this is easier said than done. However, at FICCI, we
realize that if we are to be globally relevant, we have to
set a target of 10 % GDP growth and rather than debating the
“Why’s” spend time focussing on the “How’s”.
Gandhiji said “If we want to achieve success we should
not repeat history but create a new one”. We no longer
have the luxury of choice or time. Unless we grow at double
digits, the poor will remain poor, the markets will remain
where they are, and we will run the danger of being relegated
to the backwaters of the global economy.
The Prime Minister in his Independence Day Address called
upon all of us to make India a Developed Nation by 2020. Pradhan
Mantriji, in this 75th year of FICCI, permit me to humbly
place before you our Vision for India – a vision that
reiterates our confidence on the power that India possesses
to transform itself and its people. For too long, have we
lived with being termed as a “Developing Nation”.
Let us resolve now that working together we must achieve
this. We must now create a competitive and confident India
– a respected India - a country capable of providing
the basic necessities of life including education, health
and security to all, a country whose spiritual strength and
heritage shows the path forward to the global community, a
country which is an icon for its unity while celebrating its
diversity, a country that not only has food security but is
capable of feeding the world, a country capable of demonstrating
its intellectual capability by leading the world in sectors
such as IT, Health Care , Biotechnology and other knowledge
related fields and a country that is capable of emerging as
the centre of manufacturing excellence to satisfy not only
its domestic needs but also those of others around the world.
That is our Vision.
It is time, Ladies and Gentlemen, that we define a new future
for India, where we demand growth and not adjust to circumstances.
It is time that we have a Shared Vision, a vision that Government
believes in and facilitates, a vision that Industry believes
in and creates, a vision that our human capital is determined
to achieve and a vision that every child grows up with a vision
which all the major political parties share and support, whether
in power or not. Let us be inspired by our timeless Vedas
which say:
Let us walk together
Let us speak in one voice
Let our hearts beat together
It is time to demolish the walls that confine us to thinking
within the box, restricting and putting a cap on our potential.
It is time that we spread our wings and learn to fly with
the speed and dexterity that speaks of the thousands of years
of our experiences, our tradition and heritage. Let the spirit
of freedom prevail in every aspect of our lives – in
our vision – in our thinking.
Henry Ford once said, “You can’t build a reputation
on what you’re going to do”. We need to walk the
talk. Indeed, if we are to achieve a Vision of 10 % growth,
we have to demonstrate the commitment and urgency of our intention.
Whilst the world around us is aging in a few years we shall
have 400 million young people below the age of 35 – unparalleled
youth power and potential. We have to Empower the millions
in India especially in rural India, who can contribute to
the productive streams of the economy in the next 5 years
and give them the Power to Earn, the Power to Spend, the Power
to Save, and the Power to Invest. In short, we have to give
the Power to the People of India to unleash their talents,
their potential and their entrepreneurial spirit. Can we create
50 Indian Multinationals by the year 2010 ? I believe we can.
And we do not have to look any further. Prime Minister, Sir,
the people sitting in this hall today, are those who can help
us achieve this dream. We are your soldiers who have the will
to fight, the capacity to sustain and the determination to
succeed. However, we need to be empowered to create, we need
to be unfettered so that we can run faster and we need an
environment that is secure, stable and competitive. We need
to see reforms happening quicker. If we can unleash these
forces and encourage the very spirit of Indian enterprise
that FICCI has strived to nurture over the last 75 years of
its existence we will truly be able to declare, in the words
of Aditya Birla – “We are not afraid of competition,
let competition be afraid of us.”
We need to see that growth not dissent is the common minimum
agenda. If we make India an attractive place to do business
for Indians it will automatically become an attractive destination
for both Foreign Direct Investment and Non Resident Indians.
We, at FICCI, are deeply aware that Government has the will
and the capacity to transform India into the economic powerhouse
that it can and should be. Prime Minister, Sir, we heard with
admiration, your vision statement, once again from the majestic
Red Fort on Independence Day this year. Your confidence in
the future of India, and on the power of our National Pride
is something that FICCI shares in entirety. You said that
day “ Sometimes, we tend to talk about our shortcomings
much more than is necessary. This gives rise to disappointment.
The Nation’s energy dissipates. On the other hand, the
feeling of national pride inspires us to work to achieve more…….I
believe that if one billion people in India resolve to make
a difference, we will “
Having said that, I recognize that each big dream, each big
target will have to be broken into smaller, measurable tasks.
The roadmap to 10 % growth is well known. While the “wish
list” can be as big as we want it to be, “the Immediate
Action List”, in our humble opinion, should contain the
following:
First, reforms and development in agriculture would be one
of the most important pillars on which the sustained growth
of our economy would depend. You were extremely kind and patient
in listening to a series of presentations on agricultural
reforms made by FICCI in Panchvati recently. We need another
revolution in this sector to provide Freedom to the Farmers
– the freedom to produce what they want. - the freedom
to sell whenever and wherever they want – the freedom
to diversify their crop. We need to assist them in increasing
yields and productivity through management chains and through
a knowledge revolution in agriculture and focus on reduction
in transit and storage losses by development of suitable infrastructure
including Commodity Exchanges and Forward Markets. We need
to revisit the Agricultural Products Marketing Commodities
(APMC) Act, Scrap the Essential Commodities Act and have an
integrated Food Law which facilitates the Farmer. We could
add 60 million hectares of cultivable land presently untapped
through better minor irrigation – having an employment
potential of 100 million jobs - boost agro processing and
further deepen the reach of the Kisan Credit Cards which already
encompass more than 24 million farmers and Rs 50,000 crores
of loans disbursed.
Second, unleash a new revolution of ‘Jal Swaraj’
with substantial investment in irrigation and water harnessing
projects. These are the best investments today. They have
the best incremental capital output ratio and also have the
potential to provide millions of jobs apart from improving
the food and water security of the nation. The impact of this
on the rural economy and the incomes and savings of rural
India would be instrumental in spurring demand and growth
in all other sectors of the economy. It is shocking that out
of the 400 million hectometers of precipitation in India,
only 100 million is retained in the soil. The water available
per person in India has fallen from 3450 cu mt to almost one
third i.e., 1250 cu mt and is expected to fall to only 760
cu mt by 2050. And 200 million people of India still do not
have access to safe and clear water.
Third, allow me to turn for a moment to the critically important
sector – manufacturing. Despite the introduction of reforms
targeting this sector various studies conducted by FICCI show
cost differential and penalties on industry of 16-20%. It
is disconcerting to find that the size of this sector as a
proportion of GDP has not grown between the year 1990 –2000
and is a mere 16.8 per cent while the sector has doubled in
countries like Korea. This has also led to negative repercussion
on the growth of employment and the lack of buoyancy in Government’s
revenues. With 3/4th of Government’s tax revenue coming
from the manufacturing sector, the shrinking size has also
meant over-taxing this sector more and more. Lower our current
tax burden of 33 – 44% in the form of indirect taxes,
many of which are not levied on imports, and we will give
you real self-reliance based on competition and not through
protection.
Fourth, infrastructure. The telecom revolution has reached
the common masses. The progress on the road front is also
commendable. However, the power sector, despite several reforms,
is yet to respond to the needs of today. Tariff policies are
yet to be streamlined and cross subsidies are becoming counter
productive. Poor infrastructure adds several points to our
lack of competitiveness, and needs most urgent attention.
What has been done for telecom and partially, roads now needs
to be replicated in power and ports and the Electricity Bill
2001. What of the Major Port Trusts (Amendment) Bill 2001
which will corporatise the major ports and give flexibility
and autonomy of operation? What of the Airports Authority
of India (Amendment) Bill 2000 which will fulfill your dream
of super global airports as gateways to our nation? Pradhan
Mantriji give us infrastructure and we will give you competitiveness,
employment and wealth creation.
Fifth, employment opportunities need to be enhanced through
a multipronged strategy. We must train people vocationally
so that we create “employables” and not just graduates.
Labour reforms are well overdue. The organized labour force
is no longer growing, because no one – be it Government
or Industry – can afford to provide employment with the
current anti-employment labour laws. We are concerned that
political will has been elusive on this score, and unless
major changes take place here, organized employment is unlikely
to grow and the country’s largest asset may have to be
accounted for as a contingent liability. Restructure the labour
laws with a human face and we will partner labour to give
you productivity that walks on two feet – entrepreneurship
and workmanship.
Sixth, the financial system. Our Capital Markets continue
to be a cause for concern. . Without active and vibrant markets
the growth capital requirements of Indian Industry and trade
are unlikely to be met. Whilst Banks and FIs are flush with
funds, they are increasingly risk averse and the savings do
not find their way into Domestic Investment. Project Finance
which accounted for over Rs 50 –60,000 crores of funding
has shrunk to less than Rs 10,000 crores. Clearly India at
its current state of evolution needs development financial
assistance and this merits urgent attention. It also needs
to inject real management autonomy to it’s public sector
banks by passing the Banking Companies (Acquisition and Transfer
of Undertakings) Act which lowers minimum government equity
to 33% from the current 51%.
Seventh, fiscal responsibility is critical. The Nation is
crying out to see the passing of the Fiscal Responsibility
and Budget Management Bill without its truncation or mutilation.
Unproductive Government expenditure has largely contributed
to a combined deficit figure of over 12.5 % of GDP. This means
less money for developmental purposes. The finances of many
States are in deep trouble, and this poses to be an extremely
large problem for the economy in the years to come. Instead
of fixing the holes in the bucket States are only resorting
to more and more levies. A right step has been taken to link
state level reforms with resource allocation. This needs to
be practiced in letter and spirit. Discipline accelerates
development and is not incompatible with democracy.
Eighth, accountability. We have large intricate systems in
every sphere – be it government, banking, public utilities
or politics. However, if the systems are inefficient or they
do not deliver the right goods, we have no way to provide
redressal or disincentives, leave alone any penalty. Nothing
can really work in such a liberal scenario. Even our judicial
system cannot dispense justice on time, because of the phenomenal
backlogs. Remove the Inspector Raj and we will give you lower
cost and higher productivity. Traders and entrepreneurs still
have to deal with Sales Tax Inspectors, Food Inspectors, Police
Inspectors, Drugs Inspectors, Factories Inspectors, amongst
many others. There is a need for mindset change to percolate
to the lowest levels of the Government to inculcate an economically
progressive outlook.
Ninth, with 400 million young persons below 35 we must remodel
our system of Education and Vocational Training so that in
five years - we are the largest hub of knowledge enterprise
in the world – be it biotech or R&D, IT or creative
entertainment – we account for 25% of the $ 300 billion
BPO market and set up 50 more world class centers for excellence
in education and e-governance.
Pradhan Mantriji, while our fight for political independence,
supported strongly by leaders of Indian industry of FICCI
ended in 1947, the unleashing of our true potential still
remains unfinished. We know what needs to be done but then
we Indians love to debate. We love to carry analysis to the
point of paralysis. We urge you to continue your lead of making
all this time bound – you gave three months for the divestment
debate and despite odds your drive saw a consensus emerge
within this time. We salute you for this and ask that this
paradigm of time bound debate be replicated everywhere else
too.
In closing I do not for a moment suggest that we should look
only inwards. We must expand our vision. We must benchmark
global standards. But we must also stand up and assert ourselves.
India is much more than a developing nation. India is a land
of knowledge. India is a land where we respect human values.
India has a Diaspora that has enriched the lives of other
nations - in some ways it is Indianising the Globe, in answer
to the globalization of India! India is certainly not a creature
of geography, it is a creator of history. India lives in its
outstanding people. We are no less than any other country
in the world. We have a rightful place in the global comity
of nations, and it is a place that we must rightfully take,
not by assertion, but by merit, not by rhetoric but by action.
There are not many countries in the world which respect freedom
and democracy more than us. There are not many countries who
have achieved the kind of milestones that we have. Yet, we
hesitate to recognise our own strengths. Let us be proud to
say we are Indians. Let us be proud to show our strengths.
Let us toil, let us strive, let us leave no stone unturned
to ensure that we succeed as a nation, as Indians, as citizens
of a global world. In this world we must realise that only
strength respects strength. And if we have to assert our place
in the global arena, we must believe in our strengths, our
capabilities and our dreams. Why do we need to be apologetic
that we are capable, self-sufficient or even a nuclear power?
Why do we have to fight shy of saying that we can stand our
own amongst the best in the world? Let us go out and say -
Yes, we are Indians. We believe in ourselves and have faith
that our capabilities are no less than any one else in this
world.
As I step down as President, I share a dream where India
will reach new commanding heights in the global economy, where
our people become wealth creators be it in knowledge or resources,
and where the next generation will truly be free – to
create, to compete and to excel. I ask all of you today to
help FICCI achieve this dream because I know that amongst
you are the dreams and aspirations that will make India proud.
Let us come together in our quest for economic supremacy.
We are inspired by the poet Atalji:
Aahuti Baki, Yagya Adhura
Apno ke Vighno ne Ghera
Antim jay ka Vajra Banane,
Nava Dadhichi Haddiyan galayen,
Aao phir se Diya Jalaye
Jai Hind!
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