The Hindu Business Line : Govt-industry: A maturing relationship

The Prime Minister's address at the Annual Session of the Confederation of Indian Industry last week has spawned much debate in the media. The tenor of the discussions, the colourful phraseology used are somewhat intriguing. There are hints made by various commentators of coercion, admonishment and the like. It is important to put the Prime Minister's speech in the proper perspective because it reflects the maturing of a relationship between the government and industry.

Even as Dr Manmohan Singh unveiled his 10-point agenda for industry action, he did so by inviting Corporate India "to be a partner in making ours a more humane and just society." He went on to say: "We need a new partnership for inclusive growth." The charter that the Prime Minister presented gels admirably with many of the initiatives that Indian industry has launched over the last 15 years.

Change in industry

In fact, the attitudinal change in industry towards the imperative of inclusive growth was reflected in the theme of the CII's Annual Session itself. For example, the concept of Corporate Social Responsibility (CSR), which he wanted instituted, has begun to find a major place in the boardroom agenda. There are shining examples of industry demonstrating a healthy respect for the welfare of workers as well as their families. What is needed is for these models of good CSR to be multiplied several-fold. Employment opportunities to the less privileged was a major appeal made by the Prime Minister. In doing so, he acknowledged the Affirmative Action agenda presented to him by industry. Clearly, there is recognition in industry of the importance of skills development and the need for Affirmative Action to provide greater employment opportunities, particularly to the less privileged sections. No doubt, the Government will study the progress of the Affirmative Action programme launched by industry and its impact.

Skill development

Skills development is a very fertile area for cooperation between government and industry. The ITIs need to be modernised and, indeed, several new trades must be introduced in the vocational education stream.

At another level, there is a huge population of school dropouts that can be usefully skilled up to meet the growing needs of the service sector. Clearly, people development has to be a major public-private partnership if India is to further hone its competitiveness.

The Prime Minister made a telling reference to some other issues such as application of eco-friendly technologies; innovation; fight against corruption; and socially responsible advertising. All these are unexceptionable points for consideration by industry. There is considerable appreciation of environmental and innovation issues in Corporate India. ISO 14000 is becoming widely accepted as a system standard, and innovation is being used increasingly as a strategic tool for competitiveness. Industry is no longer in denial on the issue of corruption and proactive steps have been taken to address some systemic issues in this regard.

Showing the mirror

In the 10-point social charter the Prime Minister presented at the CII Annual Session, the issue of remuneration to promoters and senior executives seems to have excited a lot of passion. The Prime Minister was perhaps appealing to the conscience of industry and not expressing any intent to legislate. It is characteristic of the Prime Minister to "show the mirror" to Corporate India and let the message go home.

Clearly, the Prime Minister's address at the CII Annual Session signals the maturing of a relationship between two key partners in economic development. There is the unquestionable role of government in creating the right policy environment and there is a role for industry to use its entrepreneurial capabilities to create greater wealth which can aid economic and societal development. Both have their work cut out.

(The author is a former Director-General and Adviser to President, Confederation of Indian Industry)

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