The Confederation of Indian Industry (CII) has a new President in R Dinesh, who is Executive Vice-Chairperson of TVS Supply Chain Solutions Ltd. Dinesh has taken over at the helm of CII when the economy is structurally on a sound footing and private sector is gearing up to ride on the growth momentum. 



You have recommended eight reform action points for taking India’s growth to 7.5 per cent levels on sustained basis. Which of these should be immediate priority?

I would say four of them — financing growth; India on the global map; energy transition; and continue with decriminalisation of economic and business facing laws (create legal and procedural safeguards relating to personal liability of directors).


Could you elaborate on the reform on financing growth?

We feel the main challenge for Corporate India in the coming days is going to be finding the necessary growth capital and meeting the huge funding requirement for the energy transition.


So how can this financing issue be solved?

Measures need to be taken to ensure that more pension and insurance funds flow into financing growth capital of domestic corporates. 

Currently, investments of pension funds and insurance monies have several restrictions including investment limits, minimum rating requirements, etc.  

Most of domestic insurance and pension monies continue to be parked in government securities. There is good scope to alter the investment regulations to widen the end use of these funds among corporates.

Also, for financing the needs of energy transition, there has to be measures to attract more foreign pension funds. I am not saying that foreign pension funds are not flowing into India. But more can be encouraged. There also has to be innovative avenues for growth capital from banks.


How can domestic banks play a meaningful role? Do you want them to fund M&As?

Absolutely. Yes, time has come when domestic banks should do acquisition financing in a big way. Indian banks should be allowed to liberally participate in financing equity contribution of promoters in M&A deals.

Time has come for the Reserve Bank of India to relax rules so that banks can even fund local promoters for buyout of their partners. Both leverage buyout through bank financing as well as a 100 per cent buyout situation should be covered through domestic banks. If an Indian promoter wants to buyout his partner (including overseas), he should be funded by banks.


So where is the hurdle? Why is it not being done?

Currently, acquisition financing by banks has several restrictions. Domestic rules do not allow banks to participate in financing equity contribution of promoters in M&A deals. Typically, acquisition financing in India is now funded by foreign portfolio investors (FPI), non-banking finance companies, international banks (providing indirect equity or debt financings overseas) and onshore alternative investment funds (AIFs). 


Can you elaborate on the reform needed for putting India on the global map?

Under the reform action point of putting India on the global map, the CII has recommended setting up of National Trade and Investment Promotion Agency. The CII is all for fast tracking free trade agreements (FTAs) with UK, EU, Israel and EFTA. Gone are the days where India Inc was sceptical about benefits flowing from FTAs. Now, the entire narrative has changed, with Indian Industry wanting to be globally competitive and are therefore on the offensive towards entering FTAs.

Infact, India Inc wants faster closure of FTA talks as they want to ride on export opportunities.  The recent FTA with UAE is a case in point and Indian companies have derived lot of benefits. There has been huge upside for Indian industry from the UAE FTA. Now, Indian companies yearn for other FTAs as everyone wants to compete and be competitive.


What about decriminalisation of business laws?

The government has already initiated several steps on this front. What we are seeking is “continuation” of this exercise so that more business laws are covered. There are still concerns around personal liability of directors that need more attention from the government.