Urging industry captains to take risks, invest and kickstart the economy, Prime Minister Narendra Modi told them Tuesday “when I hear Indian companies are investing abroad and not in their own country, I am really disappointed… if you don’t take risks and invest, then will you take a management consultant’s job at a monthly salary of Rs 2 lakh.”
After listening to 27 invitees — these included industrialists, bankers and top analysts — for almost two-and-half hours at his 7, Race Course Road residence, the Prime Minister’s succinct message to Corporate India was “invest now”.
Watch Video: Prime Minister Narendra Modi Meets India Inc: Takeaways
Top industrialists Cyrus Mistry, Mukesh Ambani, Kumar Mangalam Birla, Sunil Mittal, Y C Deveshwar and Dilip Sanghvi were present at the meeting. As were SBI chairperson Arundhati Roy, ICICI Bank’s Chanda Kochhar IDFC’s Rajiv Lall, and industry chamber chiefs Sumit Mazumder, Jyotsna Suri and Rana Kapoor. Economists and analysts present included Ajit Ranade, Jahangir Aziz, Neelkanth Mishra and Subir Gokarn.
The Prime Minister entered the meeting venue exactly at 10.30 am. In the allotted time of three minutes each, some corporates ended up pitching demands for their own industry, rather than bringing fresh ideas on opportunities for India at a time of global turmoil.
Deveshwar spoke on how Indian food processing companies were paying 30 per cent tax while multinationals paid just 15 per cent withholding tax.
Mukesh Ambani spoke on the textile sector where China extends six-month credit to companies, whereas in India companies struggle even for 15-day credit.
Stating that the worst was not over for China, Ambani noted that India will be affected by the powering down of the Chinese economy. But he said that lone pursuit of growth, as in China, was wrong. “As you had said earlier, it is the quality of growth that is more important,” he said, referring to the Prime Minister’s observation on an earlier occasion.
State Bank of India chairperson Arundhati Bhattacharya said the government must do something about the stressed assets. While she sought protection for the domestic steel industry, Birla and Sanghvi pointed out that imposing safeguards or countervailing duty on imports took 15 months in India while other countries did so in less than 60 days.
At this point, the Prime Minister interjected, and asked Economic Affairs Secretary Shaktikanta Das, who was the Revenue Secretary earlier, why India could not do the same. Commerce Secretary Rita Teaotia pointed to lack of adequate data as the main reason for the delay.
The only other interjection by the Prime Minister was when GAIL chairman B C Tripathi said gas assets were not being utilised. While the government is discussing the issue of gas pooling etc for over a year now, the PM sought to know the reasons why they were under-utilised.
To a suggestion by Sanghvi that the government must utilise funds allocated under NREGA for skill development, Modi said this would require a change in laws. “And you know, how difficult it is to do that,” he pointed out. The government has had to beat a retreat on the land acquisition law after all-round opposition from political parties including allies. The Goods and Services Tax Bill is also meeting stiff resistance from a section in the opposition.
Tata Group chairman Cyrus Mistry said the government took a long time to respond to issues. Sunil Mittal of Airtel said his company was investing Rs 15,000 crore and said Indian companies must take the lead in investing. “Till Indian companies invest, foreigners won’t,” he said.
Flanked by Finance Minister Arun Jaitley and Road and Highways Minister Nitin Gadkari on either side, and several government functionaries including ministers Dharmendra Pradhan, Piyush Goyal, NITI Aayog vice-chairman Arvind Panagariya, RBI governor Raghuram Rajan and chief economic adviser Arvind Subramanian, the Prime Minister was the last to speak. Subramanian made a brief presentation on the global scenario before all invitees got an opportunity to speak.
To a suggestion that the government relax fiscal deficit targets in the short-term and increase public expenditure, Raghuram Rajan said macro economic stability was important for sustained growth in the long term. He, however, did not respond to suggestions by a majority that monetary policy be eased, or in other words, interest rates be cut to enthuse companies to invest.
After the meeting, Jaitley told reporters: “The Prime Minister said it is for the private sector to increase their investments as they have great risk-taking ability. Jo private sector ka investment hai usme gati laane ki avashyakta hai (private sector investment needs to increase).”
“Most participants said that we are going through extreme volatility, so it is going to result in some turmoil in markets and on the currency front. That situation will continue and keep evolving. It will stabilise and new issues will come up. India will be the least impacted economy for more than one reason. It is an opportunity for us because we are net importers of many commodities, oil being the most important. Fall in oil prices is going to help us,” he said.
Subramanian told reporters: “Cheap oil will help our macro-economic indicators. The Chinese slowdown and massive excess capacity in sectors like steel will put pressure. But cost of building infrastructure has come down due to fall in commodity prices. This will boost infrastructure development. India will remain an attractive destination.”