The problem in infrastructure is the delay in approvals,land acquisition,environmental clearances

Sunil Jain: When you are talking about 8-9 per cent growth and a trillion dollars investment in infrastructure,what is the impact of controversies like Niyamgiri? Will it hurt investment?

On the issue of skill development,without education and skill development,how much do you expect India8217;s growth to come down by? All over the world,issues like Niyamgiri happen but we have to deal with it in a transparent manner especially for the local community. We may have to sacrifice some projects but definitely not all of them. We need to sort out the education and skilling system. What the private sector is doing today is that whatever be their skilling requirement,they are investing in extra people to acquire those skills. So companies are setting up large skilling centres for their own people. By spending extra,they are able to get the work done. My worry is about the other part of the economy where such training in education and skills are absent. If we are able to bring the same education and skills to that part of the economy,then it too will start contributing in a more positive way. A growth rate of 10-12 per cent is difficult,unless we sort out our skilling and education system.

Sunil Jain: Has Indian industry become politician proof?

It has more or less become politician proof. Since I run an industry,I can8217;t say it is affected by politicians. So in that sense it has become politician proof.

Dhiraj Nayyar: You have a 10-point agenda at CII. Where do you expect the government to take the lead and where do you expect the industry to take the lead?

A large part of the agenda is policy driven. For example,education8211;it is not in the hands of the private sector but either the central or state government. CII is asking for the private sector to have a greater role in education,both at the primary level and the higher level. If you talk about agriculture,then our extension services are breaking down in different states. The average yields are lower today as compared to other countries. We are not able to share the existing knowledge with farmers. Most of them are dependent on the private extension services provided through the fertiliser companies. Coming to manufacturing,if we want to create labour-intensive manufacturing,then we should give a safety net because nobody wants to invest in a large labour-intensive business after knowing that there is no exit if things go wrong. The other part is financial inclusion. We have to have micro-enterprises or entrepreneurship at the rural area level,but 70 per cent of the people do not have bank accounts. So,their savings are not coming into the mainstream. Our growth can no more be driven only by large companies; it has to be driven by small additions that take place in micro enterprises.

Archna Shukla: What is your and CII8217;s stand on the Niyamgiri issue? The private sector talks about education but there has not been much action on ground? Why?

The private sector is not allowed to openly enter into higher education for profit yet and while I don8217;t think profit is the only solution,we need to create some flexibility. The need is to allow people to increase the supply along with a proper accreditation agency to set educational standards. Then let the market decide and encourage the private sector to build. I don8217;t think the government has enough funds to even create a 30 per cent enrollment ratio in higher education. On Niyamgiri,we have not taken a view as nobody from among our members has spoken on this issue. As of now,this is a one-off case. We are watching it and if there are more such cases,then we will deal with it.

Subhomoy Bhattacharjee: What is your view on the land acquisition issue? What do you think of the private sector getting subsidised land for setting up schools?

If large projects have to come up,how we go about acquiring lands is important. We are in talks with the state governments for this. We are requesting them to help the industry in land acquisitions. The fairness principle is that land should be acquired at the market rate. But if we have to acquire land,it is very difficult to go and acquire large pieces of lands for large projects so state governments definitely need to play a role. Those state governments which are more proactive will definitely attract more industry. As for the private sector getting subsidised land for setting up schools,they should be prepared for the fact that with subsidised land will come some kind of restrictions from the government8217;s side. Per se,if the private sector is encouraged to build education institutions,it is not a bad thing.

Rajat Guha: According to the current policy of land acquisition,there is a ratio of 70:30 wherein the corporate will have to acquire 70 per cent of the land and the state will help in acquiring the remaining 30 per cent. Mamata Banerjee has been saying that states should not acquire any land. What8217;s is your view on that?

If one is able to acquire 70 per cent of the land,then the state government should help acquire the rest. The reality is that it is difficult for the private sector to go and negotiate for large pieces of land. It is the duty of the state government to determine the fairness of prices offered for that piece of land. Where there are smaller projects,people will acquire land privately and go ahead.

Subhomoy Bhattacharjee: Haryana is the only state where land seems to have been acquired easily. They have bought the land themselves. But where states have intervened,like in the SEZ case in Jhajjar,it has become a national issue. What do you have to say on this?

If you want to acquire a 2-acre or a 10-acre shopping mall,people can go there and acquire it privately as it is a short-term project but if one has to be build a refinery or a large automotive manufacturing facility,the state government has to step in.

Coomi Kapoor: What made you move away from your family8217;s traditional business?

My father was in the steel business. My brother Shyam set up the company which has now become Jubilant Organosys. Today,it is a global life science company which manufactures in US,Canada and also India. We have a 1,200-people-strong research department. The motivation for change was that we wanted to move from commodity kind of chemicals to something that is more science-driven because India had opened up in early 90s and unless you build your own technology and research capabilities,you couldn8217;t aspire to be a leader. Today,we are leaders in a lot of products that we make globally,based on the kind of research we do.

Dhiraj Nayyar: Is CII more a pressure group or a think-tank or an advocacy group?

It has an advocacy role because we need to advocate for our member companies by bringing up their issues before the government. The other part we play is at the policy level,not only because we have the capability to generate policy papers but also because of our keenness to partner with other think-tanks on subjects with long-term interests,like corporate governance. Thirdly,we have worked to bring competitiveness within the industry.

MK Venu: How much advocacy do you do for small businesses as the industry associations largely confine themselves to big business interests?

It depends on the need. The larger amount of advocacy for small business is at the local level. If you look at the state where there are CII offices like Lucknow or any other place,a large amount of advocacy is done with the local groups,helping them to run their operations. The second part is to bring the best practices into the smaller industries. CII helps to manage the transition from small to medium to large and then to global.

Praveen Kumar Singh: The industry and government have placed a lot of emphasis on infrastructure development but the sectoral targets for the eleventh plan have to be brought down because not enough investment came in. Now the government is planning to bring in investment of 1 trillion in the twelfth plan. Are you hopeful that this target will be achieved?

Our last plan targeted about 500 billion. Sectorally,we have a problem. On roads,the government is trying to take the pace of daily construction to 20 km by the end of the year. The government is fully aware that this is most critical for building competitiveness for India8217;s overall manufacturing ability. I think the target of a trillion dollar is achievable if you look at the urbanisation programme India has and the capacity that our sectors have developed. The PPP model has also started to evolve in a manner where people are seeing good results. The problem is delays in approvals,delays in land acquisition,delay in environment clearances for projects. I don8217;t think funding for bankable infrastructure projects is a problem. The problem is only dealing with the process of it as there are many agencies involved that have to give approval.

Ashish Sinha: What is the CII8217;s stand on affirmative action and what is the turnover of CII?

It makes its own surpluses based on the membership fees but most of it gets spent. On affirmative action,there should not be a government diktat on how much to do. But we do a huge amount of work on employment,entrepreneurship,etc. We are telling all our companies to declare their numbers on SCs and STs.

Soma Das: At a time when two of three chambers are being headed by pharma people,there are fears in some quarters that we are moving towards a dearer medicine regime as MNCs are buying over large domestic pharma companies. Are these fears unfounded?

At CII,we don8217;t see it that way. If some company is acquired,that is a commercial decision of the owner. Today,we are acquiring companies in the US. One has to follow the laws of the land and there is enough competition in the Indian pharmacy sector. Indian generic producers are very smart as they have helped reduce prices globally. The Indian pharmaceutical industry should be proud that the largest number of FDA approved facilities outside USA are now in India. I think there will be enough of competition in India to keep the prices low and there are new players coming up.

Soma Das: There is a thought process within the government to bring more drugs under the price control net. Do you think this is a step in the right direction?

I don8217;t like this price control business; I prefer a policy mechanism where we create competition so prices remain low because in India,one guy cannot control all the products. In the case of life-saving drugs,the government can intervene and force us to reduce prices.

Rishi Raj: The industry groups largely have a common approach to a lot of issues. So is there a need to have three different chambers?

Competition makes us more efficient. We try to provide better services to our members so that they stick to us. If we have only one chamber,then the services will get affected. CII8217;s strength is to take the best practice from one member and share it with the other.

Girish Prasad: Do you think that price control has affected the ability of companies to make substantial investments in drug research?

Drug research has nothing to do with price control because price control is mainly on generic drugs. I think the constraint is in our mindset. Before the nineties,we never invested in Ramp;D so our real investment started in the late 1990s. Today,we believe that we need to develop our own technology. In drug research,it takes 12-15 years before you can bring a product into the market. We see India-developed drugs entering Indian and global markets. Today we are doing drug discovery for some of the other companies. Those drugs will be India-developed even though they will be launched by somebody else8211;we will get royalties on it. On the research side,we are moving very fast and I won8217;t be surprised if people start considering India and China as a research base for future companies. Indians who used to do this work in US and Europe are now coming back and working here.

Archna Shukla: We are seeing the business families falling apart. What8217;s the reason behind the Bhartias still being together?

The best way to run a family business is tremendous communication and alignment and that comes by working together for a number of years. So I can8217;t even think of a division because we are two brothers and we have been working together for the last 25 years and we have built it together and not inherited it. We enjoy each other8217;s company and we are pushing our children to build their own enterprises which are funded by the family. If you look at US and Europe,there are examples of family business having survived for more than 200 years.

Transcribed by Neha Pal