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Confederation of Indian Industry
About CIIAbout CII
Works to create and sustain an environment conducive to thegrowth of industry in India, partnering industry and governmentalike through advisory and consultative processes.
Founded 114 years ago, a non-government, not-for-profit, industryled and industry managed organization.
Direct membership of over 7800 organizations from the private aswell as public sectors, including SMEs and MNCs.Creates a conducive, enabling climate for Indian businesses topursue sustainability goals.
With 64 offices and 7 Centre's of Excellence in India, and 7overseas in Australia, China, France, Singapore, South Africa, UK,
and USA, and institutional partnerships with 223 counterpartorganizations in 90 countries, CII serves as a reference point forIndian industry and the international business community.
Confederation of Indian Industry ' services includes and covers WTO, TQM, TPM, Technology & IPR. SME, Skills Initiative, Library,
Invest India Services, Intellectual Property Rights (IPRs),InformationRisk Management, Green Business, Exports, Environment
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Confederation of Indian Industry
2008-09 2009-10 2010-11 E
Agriculture 1.6 -0.2 2.0 3.5
Industry 3.9 8.2 8.5 9.0
Services 9.8 8.7 9.3 9.5
GDP 6.7 7.2 8.0 8.5
CII Estimates GDP Growth at 8.0 8.5% inCII Estimates GDP Growth at 8.0 8.5% in
2010-112010-11
Rainfall during 2009 was significantly deficient at 23% ledto decline in agricultural production
A recovery in agriculture likely in the coming year leadingto upside in GDP growth; Industry and services to remainstrong as capacity expansions take place to takeadvantage of rising demandSource: CSO, CII Research
India has weathered the global economic crisis better than
other countries EIU. India considered an emerging economic superpower and
part of G20.
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Indias economic outlook remains veryIndias economic outlook remains very
robustrobust
India has thepotential to growfastest over thenext 30-50 yrsifdevelopment
proceedssuccessfully
0
1
1
2
$2T
2009
$1.2T
2015(estimate)
$1.8T
India real GDP (at 2009 prices)
GDP expected to growat
~ 8% to reach ~$2T by2016
0
10
20
30
40
$50T
China
44
US
35
India
28
2050 GDP
103 1Currentrank
India projected to be
#3 largest economy by2050
Calendar year; Exchange rate: INR50= USD1Source: Euromonitor; EIU; Goldman Sachs(BRIC report)
8%
CAGR
*
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However we face Significant ChallengesHowever we face Significant Challenges
Global developments: Developments in EU-Greece
highlight the fact that global conditions will remainvolatile for some time; excessive dependence on foreign
capital inflows is not recommended for India
Exchange rate: Currency fluctuations being driven by
external conditions will have an impact on the real sector;important role for RBI in preventing excessive volatility
Trade prospects: Improving with stabilisation in the
global economy but growth in developed economies will
remain weak in the near term; need to diversify markets
Inflation: urgent need to get inflation under control;
monetary policy cannot be the only instrument when the
drivers food, fuel and commodities.
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However we face many significantHowever we face many significant
challengeschallenges
Source: 1(% of total population) Expert Group on Methodology for Estimation of Poverty - chaired by Prof. Suresh D. Tendulkar, 2010 2 2005 PPP adjusted figure based on World Bank poverty estimate for developing world (2008);
*China and Brazil >90% (% of pop. aged 15+)- Euromonitor
^ Transparency International- India scored 3.4/10 where highest was 9.4 (New Zealand)
High Poverty rates:- Unacceptable poverty
(37%1)
- 456M2 people live on
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Two biggest sources of employment in ourTwo biggest sources of employment in our
economy are agriculture & private sectoreconomy are agriculture & private sector
Note: *Excludes unorganized workers in the organized sector; ^consists of those in the working age group (15-59) actively seeking employment;1 includes community, social and personal services; 2 includes mining and quarrying; transport, storage and communication; finance, insurance, realestate; electricity , water etcSource: Registrar General of India; NSSO; Indiastat; Labour Bureau of India
0
20
40
60
80
100%
Urban(29%)
Rural(71%)
402
Others
Construction
Manufacturing
Trade,hotel,restaurant
Agriculture
402
Public
Private
201
Em ploymentby location& sector (M); FY 200 7
Services
7
G t t t
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-25
0
25
50
75
100
125
Expectedincreasein numberof jobsby sector(M); FY 2007-12
FY 2007-12
58
FY 2007- 17
120
-4
Go ng orwar , t e pr vate sector wo ng orwar , e pr va e sec or wneed to be the primary driver of creatingneed to be the primary driver of creating
new jobsnew jobs
Note: Excludes unorganized workers in the organized sector; ^consists of those in the working age group (15-59) actively seeking employment; * includes community, social and personal
services; ^ includes mining and quarrying; transport, storage and communication; finance, insurance, real estate; electricity , water etc
Source: Registrar General of India; NSSO; Indiastat; Labour Bureau of India
Private sector growth needs to increase from projected9.5% growth to ~12%+ annually to close job gap
Finance, insurance, realestate and business services,
Trade,hotel,restaurant
Manufacturing
Community,social andpersonal
services
Construction
Transport,storageand
communication
Agriculture
Mining & quarrying
Elec. gas & water supply
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Four key enablers for faster sustainableFour key enablers for faster sustainable
growth over the medium termgrowth over the medium term
CII Theme 2010-11: Business forlivelihood
Businesses are part of civil society
Creating jobs is the best CSR activity
Create jobs &
livelihoods
Sustainable
enterprise
Education
Innovation
Qualified
talentpool
Effectivebusinesspractices
Employability
Entrepreneur-ship
3
4
1
2
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How do we achieve this vision?How do we achieve this vision?
We need to aim for sustained 10% GDPgrowth
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Confederation of Indian Industry
Vision 2010-11Vision 2010-11
Agriculture Manufacturing Services Infrastructure
Social
and
Corpor
ate
impera t
ives
Business for livelihood(Education & Employability, Innovation & Entrepreneurship)
Art, sports & literature
Healthcare
Inclusive society &
affirmative action Economic policy, reforms,
governance &implementation
Energy, water & climatechange
Urbanization & future cities
Education & skills
Corporate governance
Entrepreneurship, innovation
& competitiveness Trade & globalization
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Confederation of Indian Industry
Ten Point Agenda for 10% GrowthTen Point Agenda for 10% Growth
1. Agriculture needs to grow at a sustained rate of 4%
2. Manufacturing needs to register 11-12% long term average
growth
3. Service sector needs to remain robust and a growth driver
4. Physical Infrastructure needs to be of global standards
5. Education would have to be the centre of reforms
6. Skill development would need a massive step up
7. Labour environment and rules need to be conducive to
employment creation
8. Delivery mechanisms of Government need to be streamlined
9. Need New Urban Centres to come up as growth poles
10. The financial sector reforms need to be fast tracked to
enable financing of a high growth, large economy
particularly focusing on long term funding instruments and
Financial InclusionAim is to Achieve a Sustainable and Inclusive 10% Growth
by 201412
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1. Achieving 4% Sustained Agriculture1. Achieving 4% Sustained Agriculture
GrowthGrowth
To do:To do:
Raise farm productivity by improving quality of inputs Better Supply Chain Management Improving Market linkages Optimal and Sustainable use of available land Right Pricing of Power and Water
CII initiativesSpecial Task Forces constituted to address issues related to
agricultureSpecial Task Force on Monsoons
Virtual stagnation in Agriculture due toVirtual stagnation in Agriculture due to Poor infrastructure Collapse of Agricultural Extension System Decline in public investment in agriculture/
irrigation Fragmentation of land holdings
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2. Achieving 11-12% Long Term Manufacturing2. Achieving 11-12% Long Term Manufacturing
GrowthGrowth
Need an Enabling Manufacturing Policy to include
Simpler clearances and approval mechanism Encouragement to Green ManufacturingTechnologies
Appropriate Infrastructure
Flexible labour rules without diluting socialsecurity net
Easier exit policy
Friendly tax system GST and a well consideredDTC
FTAs and CECA/CEPAs to be entered into with careand consideration
Government support needed for Technologyinfusion, development and upgradation in selectsectors
Land Acquisition and R&R Laws to be in keepingwith requirement of industrialization
CII working with DIPP on New Manufacturing Policy 2010-11 would see a huge thrust to the Cluster programme of CII
CII would release a white paper on Land Acquisition and R&R CII would set up a VLFM Institute
Proposed NMIZ
Policyaddressesthese issues,therefore,needs quickenactment
Every additional 1%growth in
manufacturingcreates 20-30million additionaljobs
Need to developstrengths in labour-intensive sectorssuch as textiles,consumerelectronics,furniture andindustrial machinery
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Confederation of Indian Industry
3. Taking Services to the Next Level3. Taking Services to the Next Level
CII Initiatives in the services sector include
Developing Public Private Partnership model in healthcare space with Planning Commission
Policy dialogue with Planning Commission for a comprehensive retail policy
Dialogue with the Ministry of Tourism for upgrading skills of the manpower required in the Tourism
& Hospitality Sector for the Commonwealth games.
CII to facilitate Policy dialogues on Roadmap for accelerating growth of broadband in India to reach
695 million users by 2014
Facilitating policy dialogues for Broadcast Regulation and Distribution platforms
Key policy changes required in services sector include
Enhanced FDI participation in select areas of services Set up a National Services Competitiveness Council
Iron out Centre-state issues in the services sector
Improve the viability of the informal sector in services
Rationalise taxation issues in the sector
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4. Creating world class infrastructure4. Creating world class infrastructure
Roads and highways: Improve dispute resolution mechanism
for road development Power sector: Push distribution reforms in the power sector
through privatisation of large discoms, reduction in AT&C
losses and peak load management
Civil Aviation: Timely policy intervention for settling the
issues regarding airport infrastructure; provision of space
for establishment of MRO facilities; and, rationalization of
high sales tax on ATF
Ports & Shipping: Corporatise major ports and improve port
evacuation facilities for improving port connectivity
A CII-MoRTH Joint Task Force created to identify issuesof concern in the roads sector and suggest solutions
CII National Committee on Civil Aviation consulting withAirports Economic Regulatory Authority
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EducationEducation (primary and secondary)(primary and secondary) deliverydelivery
system needs significant improvementsystem needs significant improvement
High drop out rates throughout schooling
Teacher to student ratio of1:60 at primary level
Only halfof5th standard students can read 2nd standard text in2008
Only 28% across grades could do simple division sums in 2008
Poor quality of delivery stagnation/decline in learning &comprehension
Source: Annual report, Department of School Education & Literacy; Forbes India Budget 2010 analysis; Annual Status of Education Report(Rural) 2008
020
40
60
80
100%
Initialenrolment
100
ClassI-V
-26
ClassVI-VII
-24
ClassIX-X
-12
38
Highschool
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EducationEducation (tertiary):(tertiary): Gross enrolmentGross enrolment
rates are very low vs. other countriesrates are very low vs. other countriesGER in tertiary institutions is considerably lesser than other
countries
Gross Enrolment Ratio= (number of students enrolled in a level of education regardless of age)/ (population of official school age for thatlevel)
Source: UIS data center; UNESCO Institute for Statistics; Department of Higher Education; Lit search
0
20
40
60
80
100%
Gross enrolmentratio in tertiaryeducation(2007)
US A
82
Norway
76
UK
59
Brazil
30
China
23
India
(2006)
12
Govt of India aspires to achieve 30% enrolment in tertiaryeducation by 2020
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Confederation of Indian Industry
5. Education The Big Agenda5. Education The Big Agenda
ObjectiveObjective
To create the intellectual infrastructure and knowledgeworkers needed to sustain high growth trajectory in acompetitive global environment
CII Policy InitiativesCII Policy Initiatives
- Policy Advocacy to make teaching an attractive professionalproposition by addressing remuneration issues. Retainingtalent in the teaching profession
- Developing practical modules to encourage privateinvestment in the education sector
- Support for foreign universities coming to India (ForeignEducational Institution-Entry and Regulation Bill 2010)
- Public-Private-Partnership in developing industry orientedcurriculum and developing industry role in accreditation andrating of institutions
CII, in partnership with GoI will establish 30 Industry-AcademiaInnovation Centres across the country one in each state
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Improving employability is an urgent needImproving employability is an urgent need
Source: International Labor Organization; World Bank Human Development Report, 2006; CLSA, March 2008; Credit Suisse, December 2007; 11th plan document;Planning Commission - task force on employment opportunities, 20011 India Labour Report 2007 (http://www.teamlease.com/images/news_image/coverage2009/dec09/Addressing_22dec09_All.jpg)2 http://www.bpowatchindia.com/bpo_news/infosys_spends_rs750_crore_on_training_workforce/august-11-2008/infosys_spends_rs750_crore_on_training_workforce.html
0
20
40
60
80
100%
5
28
68 75 7880
96
Proportionof vocationally
trainedlabour force (Aged 20-24 yrs)
IndiaMexico
UKGermany
CanadaJapan
Korea
Inadequate vocationalInadequate vocational
trainingtraining
~53% of employed youth sufferfrom skill deprivation1
Barely 10-15% non-engineering
graduates are employable1
Only ~25% engineering graduates1considered directly employable;e.g., Infosys annual trainingbudget is ~Rs 750 Cr2
leads to an employabilityleads to an employability
crisiscrisis
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Confederation of Indian Industry
6. Stepping up Skill Development6. Stepping up Skill Development
ObjectiveObjective
To make India the skills capital of the world. Develop the skillsneeded to support the rapid expansion of manufacturing andservices, and develop a more productive and sophisticatedagriculture sector
CII Policy InitiativesCII Policy Initiatives
- CII is working with Universities to develop vocational trainingcenters. There is already a CII-Delhi University Vocationaltraining program
- Setting up of new skills centres : Gurgaon with ITE Singaporeand Balasore with IndiaCan
- CII has build sector specific Skills Councils for Agriculture ,Hospitality, and Automobile in partnership with the EU. Other
such councils are on the anvil- CII is partnering with Ministry of Rural Development to develop
vocational training in rural areas based on local demand forskills and provide placement services for the trained workersLaunch of 10 new CII Skill Development Centres
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7. Conducive Labour Policy to Create7. Conducive Labour Policy to Create
EmploymentEmployment
Objective
To bring together industry, governments, and labor rights groupsand create a policy environment that supports employmentgeneration, inclusiveness and productivity enhancement. Todevelop best practices in labor management and standards thatmeets global benchmarks
CII Policy Initiatives- CII is working closely with government for the simplification and
rationalization of labor laws
- CII is developing best practices and practical modules for contractlabor keeping in mind the objectives of livelihood sustainability
- CII is working with industry and other stakeholders on occupational
safety and is an active participant in the National Safety Council- CII is closely involved in the policy formulation process with the
Central Apprenticeship Council and the Central Board for WorkersEducationCII to release White Paper on Labour Regulations
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8. Improving Government Delivery8. Improving Government Delivery
SystemsSystems
Quick implementation of Unique Identification Scheme
Move to a system of cash transfers or coupons compared topresent system of subsidy in specific items
Significant improvement possible in case of targeting foodsubsidies by moving to food coupons that can be redeemedagainst food supplies in any retail outlet
Greater devolution of power to local governance bodies such asPanchayats in rural areas and municipalities in urban areas
Willingness of government bodies to work with private sector forensuring better delivery: PPPs in education and health servicesare promising
Set up regular monitoring/ assessment system using specialgroups comprising experts, government officials and industry, inareas where large outlays are made by government
CII Task Force on Technology for Inclusive Development
CII-State Government Monitoring and Implementation TaskForces
National Sectoral Task Forces (Government / CII) on monitoring
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9. New Urban Centres as Growth Poles9. New Urban Centres as Growth Poles
To overcome these problems, need to give increased power to ULBs through
ensuring their financial independence and viability Need to implement 74th Constitutional amendment
Enhance execution capabilities by devolution of operational and financialpower to local bodies
Encourage PPPs to create Enabling Environment at State Level
CII to facilitate dialogue on Real Estate Regulation Bill
CII report on Intelligent Urbanisation A Roadmap for Indiathrows light on how technology has a role in meeting Indias
urbanisation goals
Structural challenges driven by nature of urbanization in Indiai.e. unprecedented scale, high density cities and
predominantly Brownfield
Policy limitations private participation and Urban LocalBodies functioning with poor execution capabilities
Administrative problems Municipalities are overburdenedresulting in poor levels of service delivery
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10. Financing High Growth10. Financing High Growth
Develop Rupee denominated corporate debtmarket for raising long-term capital
Increase access to international debt markets
Expansion in capital base of banking system
Greater FDI needed in Insurance and Banking Resources currently locked up in financing
government debt needs to be freed
CII is creating New Task Forces on:
-Financial Stability & Development; and
-Financial Inclusion
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Sma /m cro entrepreneurs account orma m cro en repreneurs accoun or
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Confederation of Indian Industry
Sma /m cro entrepreneurs account orma m cro en repreneurs accoun or~50% of jobs, but multiple issues hamper~50% of jobs, but multiple issues hamper
growthgrowth
Note: Self employed people may or may not be entrepreneurs, and may or may not be skilled
0
20
40
60
80
100%
Peopleemployed
(FY07)
Agriculture
402
Se
lfemployedR
egular/casu
al
workers
201
Private
>10
Private
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InnovationInnovation
Need to develop India specific Innovation Ecosystem Model for
meeting challenges unique to Indias context
A Public funded privately managed endowment needs to be
created, which would address the early stage finance
requirement of innovation
Favourable Policies and Incentives to increase Industrys
investment in Innovation (R&D/Design/IPR) from current level
of 0.2% of GDP to 1% of GDP in next five years through
Industry-Academia/R&D institutions-Government Partnership
CII, in partnership with Ministry of Science and Technology, will establishGlobal Innovation and Technology Alliance (GITA) to implement
Governments Technology and Innovation Initiatives national andinternational
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Inclusiveness and Affirmative ActionInclusiveness and Affirmative Action
Indian Industry shares the nations resolve to address
the deprivation suffered by the SC/ST communities and
commits to stepping up its Affirmative Action agenda
in the years to come to ensure that India becomes a
land of equal opportunity
CII has developed a voluntary Code of Conduct for
members to implement positive discrimination
CII would take the success stories among its members
in the area of affirmative action across the country toencourage similar initiatives in other firms.
CII has created a Affirmative Action Fund with industry
contributions to finance affirmative action activities in the
private sector
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Confederation of Indian Industry
Corporate GovernanceCorporate Governance
Key Issues
Inadequate number of qualified / competent independentdirectors
Unutilized whistle blowing mechanismsFocus Areas for CII
Directors Training & Orientation Directors Liability Issues Effective whistle blowing methods
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Proactive advocacy for adoption of CII Voluntary
Recommendations on Corporate Governance
T d d Gl b li tiTrade and Globali ation
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Trade and GlobalizationTrade and Globalization
CII Goals
Double Indias goods and services exports by 2014 from currentlevels, double Indias share in world exports by 2020
Substantially expand industry linkages in global production chain
and access global market through strategic acquisitions and joint
ventures abroad
CII Policy
Develop a dedicated commercial intelligence mechanism for
Indian industry
Focus on capacity building on quality accreditation, export cycle
management and logistics to make Indian industry more
competitive
Engage with government to ensure trade agreements have
positive outcomes for industry and are equipped to deal with
industry concerns on emerging trade issues like non-tariff30
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30 Overseas Business Delegations to key countries (China,Japan, S Korea, UK, USA, Germany, France)
15 Planned meetings with Heads of State (South Africa, Russia,France, UK, Japan, S Korea, Canada)
CEOs Forums with countries of strategic interest (14 newCountries identified focus on emerging economies)
Regional Conclaves in emerging markets of LAC, Africa, CIS Strategic dialogues Track II with China
Business Summits ASEAN, EU, IBSA, Pakistan
Global EngagementGlobal Engagement
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f d i f di d