PM’s Inaugural address at Economic Times Global Business Summit

Highlights of PM’s Inaugural address at Economic Times Global Business Summit

I am happy to be here today, to address the Global Business Summit. This is a good platform, for bringing together economists and industry leaders. I compliment The Economic Times for organising this event. Over the next two days, you will debate growth and inflation, manufacturing and infrastructure, missed chances and unlimited possibilities. You will see India as a country of opportunities, unmatched across the world. I assure you that your inputs shall receive my government’s highest attention. Friends, मकर संक्रांति (Makar Sankranti) was celebrated on 14 January. It is an important festival. It is the beginning of उत्तरायण (Uttarayan), which is considered to be a पुण्य काल (Punya kaal). The लोहड़ी (Lohri) festival also coincides with it. On this day, the Sun begins its journey North. This marks the transition from winter to spring. The New Age India has also begun its transition; from a winter of subdued achievement lasting 3 to 4 years, to a new spring that beckons. The country had fallen into deep despair, with two back-to-back years of below 5% growth, and governance at rock bottom. A series of scams, from telecom to coal had paralysed the economy. We deviated from the dream of India as a land of opportunity. No longer can we afford the flight of capital and labour, for lack of opportunity. We have to repair the damage that has happened. Restoring growth momentum will be an uphill task. It will take hard work, sustained commitment and strong administrative action. But we can overcome the mood of despair. And we must. It is in this context that all the steps we have taken must be seen. Friends, Destiny has favoured me to serve this great nation. Mahatma Gandhi said that we should not rest until we “wipe every tear from every eye”. Elimination of poverty is fundamental to me. This is at the core of my understanding of cohesive growth. To translate this vision into the reality of a New Age India, we must be clear about our economic goals and objectives. The government must nurture an eco-system: • where the economy is primed for growth; and growth promotes all-round development; • where development is employment-generating; and employment is enabled by skills; • where skills are synced with production; and production is benchmarked to quality; • where quality meets global standards; and meeting global standards drives prosperity. Most importantly, this prosperity is for the welfare of all. That is my concept of economic good governance and all round development. It is up to us to create conditions for the people of India to blossom and create this New Age India. Friends, Let me outline what we are doing to usher in this new spring. My government is moving fast in designing policies and laws to promote growth. This is where I seek everybody’s cooperation. First, we are committed to achieving the fiscal deficit target announced in the budget. We have worked systematically in this direction. Many of you practise Kaizen in your companies. Reducing wastage means cutting excess and preventing misuse. This requires self-discipline. That is why we have the Expenditure Management Commission to suggest cuts in wasteful expenditure. This way, we will make the Rupee more productive, and deliver maximum bang for the buck. Second, the petroleum sector has seen major reforms. Diesel prices have been deregulated. This has opened up space for private players to enter into petroleum retail. Gas prices have been linked to international prices. This will bring a new wave of investment. It will increase supplies. It will resolve problems in the key power sector. Today, India’s cooking gas subsidy is the world’s largest Cash Transfer Programme. Over 80 million households receive subsidy directly as cash into their bank accounts. This is one-third of all households in the country. This willcompletely eliminate leakage.  Building on this, we plan to introduce direct cash transfers in other benefit schemes.  Third, inflation has been controlled through firm measures. While falling oil prices helped, even non-oil inflation is at a very low level. Food inflation has come down from over 15% a year ago to 3.1% last month. . This set the stage for RBI to reduce interest rates, and push growth in a stable manner. Fourth, the consensus we arrived with States for amending the Constitution to implement GST is a major breakthrough. GST has been pending for over a decade. This alone has the potential to make India competitive and attractive for investment. Fifth, the poor have been included in the financial system. In a short span of 4 months, over 100 million new bank accounts have been opened under the Pradhan Mantri Jan Dhan Yojana. For a country of our size, this was an immense challenge. But with will, determination and the full support of every banker, we are today a nearly 100% banked country. Soon, all accounts will be linked with Aadhaar. Banking habits will become common across the country. This now opens immense possibilities for the future. People’s savings will rise. They will invest in new financial instruments. 1.2 billion people can hope for pensions and insurance. As the nation progresses, these bank accounts will drive demand and growth. We have always debated about social unity, national unity and so on. But we have never debated about financial unity.About bringing everyone into the financial system. This is one cause which both capitalists and socialists agree on. What, my friends, can be a bigger reform? Sixth, the energy sector has been reformed. Coal blocks are now allocated transparently through auctions. Mining laws have been changed to facilitate efficient mining. Similar reforms are on the way in the Power sector. We have revived long pending projects in Nepal and Bhutan, with the cooperation of their governments. Steps are being taken to deliver 24 x 7 Power for All, using every possible source, including renewable energy.   Seventh, India is being made an attractive destination for investment. FDI caps have been raised in Insurance and Real estate. FDI and private investment are being promoted in Defense and Railways. The Land Acquisition Act has been amended to smoothen the process and speed up matters. This will give a thrust to infrastructure and manufacturing, while protecting the compensation to farmers. Eighth, infrastructure is being given a boost. Greater investment is planned in railways and roads. New approaches and instruments are being put in place to unlock their potential. Ninth, transparency and efficiency in governance, and institutional reforms are essential elements for rapid growth. These, along with a positive regulatory framework, tax stability, and ease of doing business, are being pushed ahead at top speed. For instance, I recently assured Public Sector Banks they will have total autonomy in taking business decisions, without any interference from Government on loans and their operations. We need to use technology to deliver good governance. Whether it is a simple one like biometric-based attendance, which has improved office attendance and work culture. Or a cutting edge one, like space technology in mapping and planning. I intend to launch a massive National Program for PDS Computerisation. The entire PDS supply chain, from the FCI godown to the ration shop and consumer will be computerised. Technology will drive welfare and efficient food delivery. A major institutional reform is the move away from merely planning, to transforming India. The setting up of the National Institution for Transforming India, NITI Aayog, is a step in this direction. This will take the country forward on the path of cooperative federalism, with a competitive zeal. The NITI Aayog is our Mantra for creating trust and partnership between the Centre and States. This list can be endless. I can go on for days, but I do not think we have the time. However, I have given you a sense of the immense activity we are engaged in. We have done a lot so far and more will be done in future. Friends, Reforms are not an end in itself. Reforms must have a concrete objective. The objective must be to improve the welfare of the people. Approaches may be many. But the goal is one. Reforms may not be apparent to one and all at first sight. But small acts can drive reforms. What appears minor can actually be vital and fundamental. Further, there is no contradiction between doing big tickets items and doing small things. One approach is to have new policies, programmes, large projects and path breaking changes. Another approach is to focus on the small things that matter, create a people’s movement and generate mass momentum, which then drives development. We need to follow both paths. Let me explain this a bit. Generating 20,000 MW of power attracts a lot of attention. That is important. At the same time, 20,000 MW of power can be saved through a people’s movement for energy efficiency. The end result is similar. The second is more difficult but is as important as the first. In the same way, improving a thousand primary schools is as important as opening a new university. The new AIIMS we are setting up will improve public health in the same way as our promise of Health Assurance. To me, Health Assurance is not a scheme. It is about ensuring that every Rupee spent on health is well spent; that every citizen has access to proper healthcare. Similarly, when we do Swachh Bharat, it has multiple impacts. It is not just a fad or a slogan. It changes people’s mindsets. It changes our lifestyle. Swachhata becomes a habit. Waste management generates economic activity. It can create lakhs of Swachhata entrepreneurs. The nation gets identified with cleanliness. And of course, it has a huge impact on health. After all, Diarrhoea and other diseases cannot be defeated without Swachhata! The mantra of independence was सत्याग्रह (Satyagraha). And the warriors were सत्या-ग्रही (Satyagrahis). The mantra of New Age India must be स्वच्छता-ग्रह (Swachhagraha). And the warriors will be स्वच्छता-ग्रही (Swachhagrahis). Take the case of Tourism. It is an untapped economic activity. But tapping it requires a Swachh Bharat. It needs improvement in infrastructure and telecom connectivity. It requires better education and skill development. Therefore, a simple goal can generate reforms in multiple sectors. People must understand the Clean Ganga program, as an economic activity also. The Gangetic plains account for 40% of our population. They have over one hundred towns, and thousands of villages. Improving Ganga will develop new infrastructure. It will promote tourism. It will create a modern economy helping millions of people. In addition, it preserves the environment! Railways is another example. There are thousands of railway stations in the country where not more than 1 or 2 trains stop in a day. These facilities, created at a cost, remain unused for most of the day. These stations can become growth points for the nearby villages. They can be used for skill development. Small indeed, is beautiful.  In agriculture too, our main goal is to raise productivity. This will require using technology, increasing soil fertility, producing more crop per drop, and bringing the latest from Lab to Land. Cost of cultivation will go down as efficiency rises. This will make agriculture viable. On the output side, the entire value chain in agriculture will be addressed through better storage, transport and food processing linkages. We will link farmers to global markets. We will give the world the Taste of India. Friends, I have often called for Minimum Government Maximum Governance. This is not a slogan. This is an important principle to transform India. सरकारी तंत्र की दो समस्याएं हैं - वे जटिल भी हैं और शिथिल भी। Government systems suffer from two weaknesses. They arecomplex. And they are slow. In life, people go on a चार धाम यात्रा (chaar dham yatra) to get मोक्ष (moksha). In government, a file has to go to छत्तीस धाम (chattees dham), and yet not get मोक्ष (moksha)! We need to change this. Our systems need to be made sharp, effective, fast and flexible. This requires simplification of processes and having trust in citizens. This needs a Policy Driven State.  What is Maximum Governance, Minimum Government? It means government has no business to be in business. There are many parts of the economy where the private sector will do better and deliver better. In 20 years of liberalisation, we have not changed a command and control mindset. We think it is okay for government to meddle in the working of firms. This must change. But this is not a call for anarchy. First, we need to focus government upon the things that are required of the State. Second, we need to achieve competence in government so that the State delivers on the things it sets out to do.  Why do we need the State? There are 5 main components: • The first is public goods such as defence, police, and judiciary. • The second is externalities which hurt others, such as pollution. For this, we need a regulatory system. • The third is market power; where monopolies need controls. • The fourth is information gaps; where you need someone to ensure that medicines are genuine and so on. • Last, we need a well designed welfare and subsidy mechanism to ensure that the bottom of society is protected from deprivation. This specially includes education and healthcare. These are five places where we require government. In the five areas where we need government, we require competent, efficient and non-corrupt arms of government.We in government, must constantly ask the question: How much money am I spending, and what outcomes am I getting in return? For this, government agencies have to be improved to become competent. This requires rewriting some laws.Laws are the DNA of government. They must evolve with time. India is a 2 trillion dollar economy today. Can we not dream of an India with a 20 trillion dollar economy? Should we not create the environment for this to happen? We are preparing the ground for it. This is hard work. Quick and easy reforms will not be enough for creating a fast growing economy. That is our challenge and that is what we aim to do. Digital India and Skill India are attempts in this direction. Digital India will reform government systems, eliminate waste, increase access and empower citizens. It will drive the next wave of growth, which will be knowledge-driven. Broadband in every village, with a wide range of online services, will transform India in a manner we cannot foresee. Skill India will harness the demographic dividend which everyone talks of. Friends, Improvement in governance is a continuous process. We are making changes wherever acts, rules and procedures are not in tune with needs. We are cutting down on multiple clearances that choke investment. Our complex tax system is crying for reform, which we have initiated. I believe in speed. I will push through change at a fast pace. You will appreciate this in times to come. At the same time, we need to take care of the poor, deprived and left behind sections of society. I believe that subsidies are needed for them. What we need is a well targeted system of subsidy delivery. We need to cut subsidy leakages, not subsidies themselves. Wastage, as I said earlier, must be removed in subsidies. The target group should be clearly identified and the subsidies should be well delivered. The ultimate objective of subsidies should be to empower the poor, to break the cycle of poverty, and become foot-soldiers in our war on poverty. At this point, I would also say that development has to result in jobs. Reforms, economic growth, progress – all are empty words if they do not translate into jobs. What we need is not just more production, but mass production and production by masses. Friends, Economic development cannot take a nation forward on its own. Development has many dimensions. While on one hand we need higher incomes, we also need a society which is cohesive. Which balances the stress and strain of a modern economy. History is witness to the rise and fall of nations. Even now, many countries have become rich in an economic sense, but are poor in a social sense. Their family systems, value systems, social networks and other elements which hold a society together have broken. We should not go down that path.We need a society and economy which complement each other. That is the only way for a nation to go forward. Further, development seems to have become the agenda only of government. It is seen as a scheme. That should not be the case. Development should be everyone`s agenda. It should be a people`s movement. Friends, like the rest of the World, we are concerned about two dangers - Terrorism and Climate change. Together, we will find a way to face these. Today, everyone is looking towards Asia for inspiration and growth. And within Asia, India is important. Not just for its size, but for its democracy, and its values. India’s core philosophy is सर्व मंगल मांगल्यम् (Sarva Mangala Maangalyam) and सर्व भवन्तु सुखिनः (Sarve Bhavantu Sukhinah). This is a call for global welfare, global cooperation and balanced living. India can be a role model of growth and cohesiveness for the rest of the world. For this, we need a workforce and economy which meet global needs and expectations. We need to quickly improve social indicators. India should no longer be bracketed with the least developed. We can do this. Swami Vivekananda had said “Arise, awake, do not stop until the goal has been attained”. This should inspire us all to achieve the vision of a New Age India. Together, we can!