‘Not practical to expect correction in a year’

Sumit Mazumder, President of the Confederation of Indian Industry (CII), believes strong manufacturing muscle and improved farm practices are essential for sustainable growth.

A firm believer in Prime Minister Narendra Modi’s ‘Make-in-India’ campaign, the Managing Director of TIL Ltd, told BusinessLine in an interview that the government has done remarkably well on the domestic policy front, over the last one year, and blames industry for unrealistic expectations.

Many feel the biggest success of the Modi government so far is in foreign policy…

They have a very good foreign policy. But I don’t think that is their biggest success. There have been a lot of achievements in structural reforms which is very important for structural growth. The government is focussed on improving the ease of doing business in India. This is the crux of attracting investment.

The coal auction and mining policy are path-breaking initiatives. In the military hardware sector, dependence on foreign supplies is reduced by putting emphasis on domestic manufacturing by the private sector. ‘Make-in-India’ is the strongest campaign for industrialisation that the country has ever witnessed.

Why is industry impatient then?

Industry is impatient due to unrealistic expectations. There has been mismanagement for many years. It is not practical to expect correction in a year. May be some of the comments (promises) that the Prime Minister had made during his election campaign were a little strong, so industry is going by that.

Privately, many will admit that what had been achieved in one year is remarkable. Publicly, I think it is fashionable to oppose.

But investments are not coming…

Investment is a factor of investors’ confidence. Investors suffered over the last four-five years and are now concerned. To correct the scene, we need structural reforms. Sustainable growth is more important than haphazard investments resulting into “stop-and-go” kind of growth. The government is active in building investors’ confidence.

Is the social security initiative a precursor to more reforms?

I must say they were very innovative programmes in ensuring inclusive growth. This will create the much needed safety net and help allay fears about economic reforms in public mind.

Which are the areas where more attention is required to ensure a sustainable growth?

Agriculture surely needs a little more emphasis. Farm practices must go for an overhaul. There is no system of storing, no cold chain. So much of agri-produces are wasted. We have to bring in modern irrigation. A country’s food production cannot depend on rains. We have to streamline our agri sector and make farming a less risky profession.

What about road infrastructure? Do you think the steps taken by the government are enough to solve the crippling liquidity crunch of project contractors?

No, it’s not enough. It’s a legacy issue. The government is seized with the problem. One way to solve it is to offer sovereign guarantee, where government underwrites the contracts for new projects. I am not saying, though, that it’s the only answer.

Then what will happen to Transport minister Nitin Gadkari’s mega plan to construct 30 km road a day?

I don’t think Gadkari shared his plans. I have still got to understand how (it would be done).

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