India tops CCI list – a feat to mark 100 days of NDA rule
The automobile industry, reeling under a prolonged slump, is now on the recovery path. This is mainly due to the Modi Government giving big push to infrastructure development and its renewed focus on the Indian manufacturing industry to ensure growth of all industry sectors, particularly automobiles.
In fact, in his maiden Independence Day speech at the Red Fort, the Prime Minister, Mr. Narendra Modi, stressed the need for greater infrastructural growth, skill development, job creation, reining in of inflation and building of 100 small cities across the country.
Outlining his Vision in his Presidential’s address to Parliament, Mr. Modi said that the Government’s clear focus on manufacturing would help revive ‘Brand India’, riding on its strength of five ‘T’s – Tradition, Talent, Tourism, Trade and Technology.
India at top
With a change in government at the Centre, consumer confidence in the Indian economy has jumped by seven points during the second quarter of this calendar year, taking India to a top position at the global level. As per a global consumer confidence index study by Nielsen, a global information and insights provider, India which was ranked low in the first quarter of 2013 has now turned out to be a most optimistic country, followed by Indonesia and the Philippines.
Consumer confidence in India was indexed at 128 in Q2 2014, a seven-point increase from Q1 2013 (121). Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism.
Sensex set new record
Even within 100 days of the new Government taking over at the Centre, the Sensex has crossed the 27,000-point mark for the first time in the stock market history. This has helped the shares of many auto companies, including Tata Motors, Mahindra & Mahindra, Maruti Suzuki, Bajaj Auto, etc., registering big gains.
Making manufacturing competitive
According to the Finance Minister, Mr. Arun Jaitley, the lower taxes and duties announced in the Union Budget were aimed at improving savings which are necessary for investment and making manufacturing competitive in order to revive the growth.
His roadmap for economic recovery shows ‘civility’ in tax regime, maintenance of low rates, rationalisation of the subsidy system and boost to infrastructure and housing. He also feels that it is far better to have Defence equipment manufacture within the country with 51 per cent Indian ownership than importing 70 per cent of equipment from 100 per cent foreign-owned companies.
FTP to boost manufacturing & exports
Says Ms. Nirmala Sitharaman, Commerce & Industry Minister, and Minister of State for Finance and Corporate Affairs: “Indian manufacturers are saying that they are now becoming competent. Why can’t they have such infrastructure is a legitimate question. Indian manufacturers also should have a foot into the SEZ itself.”
The new foreign trade policy (FTP) will focus on ways to boost the manufacturing sector and exports, besides addressing the SEZ issues. The refreshing thing about the policy this time will be to understand where India’s strength lies and what are the challenges to be faced. Manufacturing will be at the core of it…SEZ would also figure in the FTP which has till now been only a compilation of schemes to boost exports and regulate imports.
Industry hails Government approach
Industry in general has expressed similar views: “The manufacturing industry overall is looking good, with the new Government taking over charge and several policy measures getting underway, like FDI in Defence manufacturing. Also, with a good practical Budget, there is a marked positive change in the overall sentiment. There is indeed an upswing in industry. Key sectors such as automobiles, electronics & information technology, energy & environment, infrastructure, auto & components and aerospace are set to fuel the growth of the Indian manufacturing industry”.
Referring to the manufacturing industry, Mr. Anand Mahindra, Chairman and Managing Director, Mahindra & Mahindra Ltd., said: “A new era has begun in Indian manufacturing. Manufacturing is the missing piece in the India growth story. The situation is to be rectified. Over hundred million jobs need to be created, which only the manufacturing sector can do”.
Mr. Baba Kalyani, Chairman and Managing Director, Bharat Forge Ltd., observed: “Nothing is closer to my heart than manufacturing. It’s the turn of India to be a global leader now”.
Overall, the recovery in the factory sector is intact, which is also signalled by the jump in HSBC’s July manufacturing PMI. Also, completion of the first 100 days of the Modi Government shows India’s political scenario once again showing signs of stabilisation.
On the road to success
Since road infrastructure is very crucial for any developing economy, the Government has set ambitious plans with a clear target as well as the delivery deadlines for the projects. The different ambitious plans include completion of the Eastern and Western peripherals expressways in three years with the aim of decongesting Delhi roads. The Rural Development Ministry is also planning a Rs. 12,000-crore funding for the Government’s flagship rural roads scheme, the Pradhan Mantri Gram Sadak Yojana (PMGSY). The funds for investment on roads will be raised through loans from NABARD to supplement the funds already allocated to PMGSY.
According to Mr. Nitin Gadkari, Road Transport and Highways Minister, the Government has plans to build roads of 30 km per day in two years by taking a number of measures, including revival of projects involving those worth Rs. 60,000 crores which were pending.