Modi for environment of trust but no incentives

Friday 26 September 2014

Modi for environment of trust but no incentives

BS Reporters | New Delhi

September 26, 2014 Last Updated at 00:59 IST

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Prime Minister Narendra Modi on Thursday made a clarion call to investors to choose India as a manufacturing destination by launching the ambitious 'Make in India' programme here. Though he offered no incentives, the prime minister promised to create a business-friendly environment. "Incentive schemes cannot attract businesses, it is important to create the environment of trust and confidence," he said.

At an auditorium packed with Indian & foreign industrialists, ambassadors & high commissioners and top government officials, Modi indicated his government would ensure that an India address was sufficient to attract investments in manufacturing. "You cannot attract investments through invitations… The most essential factor is trust. Let us start with trust and the government will intervene only if it sees any deficiency."

Defining FDI as "First Develop India", Modi urged Indian industry to first pursue business in the country and later become multinationals, if they so wished. The only two tangibles he offered for growing the share of manufacturing in India's economy from 15 per cent to 25 per cent were a 72-hour window to get clarifications on the website makeinindia.com and 25 defined focus areas.

ALSO READ: Industry captains hail PM's 'Make in India' project

No incentive was announced, but industry captains in the audience clapped without a break.

The main auditorium at the city's Vigyan Bhavan, a premier convention centre in the capital, was full by 10 am, a good half an hour before the PM arrived. Among those waiting patiently in queue to enter the hall was Reliance Industries Chairman Mukesh Ambani. But by the time his turn came, all seats had been filled and security personnel had closed the door. Ambani was let in only after his people convinced the security that he was a speaker at the function. Many ambassadors and government secretaries also had similar experiences.

ALSO READ: Poor show in manufacturing continues

Such was the rush to hear Modi's pitch for making India a manufacturing hub that hundreds in the audience had to be seated in four other halls at the venue. Modi later noticed many industry representatives standing in the hall and apologised, but remarked that "organisers are not used to this (crowd)".

ALSO READ: Core sector improvement key to manufacturing-led growth

Ambani affectionately referred to the PM as "Narendra Bhai Modi ji" and said the country was blessed with a leader like Modi. "After your interactions with Japan, China and in anticipation of your visit to the US, there is a perception of positive environment," Ambani said.

Tata Sons Chairman Cyrus Mistry praised the key decisions taken by the Modi government in the past few months. But he also pointed out that there was a need for labour reforms, such as improving employability through skilling.

Maruti Suzuki Managing Director & Chief Executive Kenichi Ayukawa was blunt in saying India was not an easy country to do business in but added it would become one of the most competitive manufacturing hubs under Modi's leadership.

Aditya Birla Group Chairman Kumar Mangalam Birla, whose business has been impacted by Wednesday's Supreme Court verdict on coal block deallocations, said 'Make In India' would be a significant initiative to create jobs and put the economy on a high-growth path.

It was also an occasion for industry to compliment the PM for the success of the Mars Orbiter Mission. Modi himself said: "Nobody should doubt Indians' capability now." No one mentioned the coal verdict or its impact on businesses. The PM, however, said the "CBI scare" and "fear of policy changes" under the previous government had hampered businesses. "I was pained to see industry wanting to exit India because of the absence of an environment of trust and confidence... From my experience of the past few months I know that has changed now." He assured the industry captains to a thunderous applause: "I promise you, your money will not sink if you invest in India." Businesses first looked for security for their investment, then growth and then profits, he said.

Many of his Cabinet colleagues like Commerce Minister Nirmala Sitharaman, Telecom and Law Minister Ravi Shankar Prasad and Power and Coal Minister Piyush Goyal, besides Cabinet Secretary Ajit Seth and Principal Secretary Nripendra Misra, were present on stage with the prime minister. Finance and Defence Minister Arun Jaitley, a key member of the 'Make In India' programme, could not attend as he was recovering from a surgery.

Modi said India must club the 'Look East' policy with the 'Link West' plan — a message, perhaps, to the US. Later in the evening, the prime minister started for his visit to that country.

Modi had first spoken about turning India into a manufacturing hub in his Independence Day speech on August 15. The ambitious scheme puts in place the logistics and systems to address potential investors' queries in a timely manner. Thursday's event also saw unveiling of a logo, a portal, brochures on 25 identified growth sectors and an promotional video. Pointing to the campaign logo, he said: "This is the step of a Lion... Make in India."

"Global companies want to come to Asia but they don't know where to look in Asia… Democracy, the demographic dividend and strong demand are important factors, and India has all three," the PM said. He added there was a Vasco Da Gama in every corner of the world waiting to discover the potential of India and invest here. He urged industry to tap the potential of huge Indian market by working towards generating employment which could in turn increase purchasing power of consumers. "that is the kind of chakra (cycle) that I am looking at."

"In 'Make In India' we provide you with an opportunity to create a market for your products. If there are no buyers, it does not matter how many Maruti cars you make," said the prime minister. On opportunities, he spoke of upcoming areas like waste management for generating power. It is like multinationals deciding to sell potatoes and tomatoes (referring to retail trade) some years ago. "Kyun Mukesh Bhai", he asked Ambani, who has expanded his retail business. The latter nodded.