We need to bring back the growth momentum: FICCI President

TV Jayan/Maitri Porecha New Delhi | Updated on January 15, 2020 Published on January 14, 2020

We should not worry too much about the temporary rise in fiscal deficit: Sangita Reddy


Against the backdrop of the forthcoming Budget, Sangita Reddy, the newly appointed President of the Federation of Indian Chambers of Commerce and Industry (FICCI) and Joint Managing Director of Apollo Hospitals Group, spoke to Businessline on industry’s expectations which include infusing more money into the economy, boost for MSME sector, focus on improving rural consumption and rehauling of education, health and agriculture policies. Excerpts:

Industry is worried about demand not picking up despite many efforts. What should the government do further to tackle the slowdown?

There is no doubt that we are in the midst of a crisis. But some macroeconomic fundamentals are really strong. The foreign exchange reserves are good and our fiscal deficit is still under 3.5 per cent, but we need that extra money — ₹1-1.5 lakh crore — to infuse into the economy. The economy needs some pump priming and we need to put the life blood of money back into the economy. This will spur some consumption, which in turn will spur investment and production. Right now, much is at a standstill. People are moving from growth mode into sustenance mode, and we need to bring back the growth momentum. This is one of our biggest recommendations. FICCI believes that we should not worry too much about the temporary enhancement of the fiscal deficit. Immediate strategic time-bound disinvestment plan should be put on the fast track so that the temporary money that is raised from the Reserve Bank of India or the bonds, is paid back through disinvestment.

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Why do you think this has happened?

The need of the moment is money in the economy. It needs to go into the hands of rural India because for the first time people have seen contraction in spending in rural India on FMCG and other products. This has happened because of many factors like agriculture not giving yields. But that is a traditional problem. The fact also remains that migrant labour used to come and work, especially in construction. Slowdown in construction has affected rural spending — like buying a smaller TV or a refrigerator. Those things have stopped. All purchasing decisions that are discretionary are being postponed. That is where we need to change the momentum of economy.

How do we move towards the goal of a $5-trillion economy?

We are committed to the $5-trillion economy. We need to go into some detailed planning on where this will come from. Exports should get focus and we should boost it so that $1 trillion, out of this $5 trillion, can come from exports. Manufacturing, particularly in core sectors, needs to be looked at. If we can boost infrastructure and construction, then this will drive steel, cement and building-related manufacturing. Also, we are expecting the Budget to give some positive boost for all Micro, Small and Medium Enterprises (MSMEs) in relation to import substitution. Across the board we must focus on new age economies. If we take digitisation, robotics, 3D printing, it is a level playing field, so let us jump right in and take the advantage.

Agriculture, livestock and dairy employ 55 per cent of population and this is sliding continuously. We have to enhance agriculture techniques and do value addition. If these are done in a cooperative manner with farmers’ participation, the average farmer income will move up. Also, education and health sectors are global soft power for India in which we are underplaying our game. We need a complete rehauling of education policy.

Is the government funding of healthcare enough?

No, and people’s out-of-pocket expenditure is still high. Health is a cause of rural indebtedness, but this will stop with Ayushman Bharat in the next two years. But we should not sacrifice the quality. The Government has identified 12 impact sectors and medical value travel is one of them. We should make medical value travel one of biggest points, like Singapore and Thailand did. For example, in Bangkok, there is a separate immigration queue at airport for patients.

How do we provide healthcare for all which is affordable and at the same not lacking in quality. Why would a middle class taxpayer pay that premium, and be told go to this hospital, that they may not want to go to, because it may fail the quality test?

Quality, compulsory payments and giving universal coverage are three key points. This is what healthcare systems all over the world are seeking. They seek universal access and quality at lowest possible price.

Without stepping on government funding, the lower middle class and middle class of India could get a self-paid insurance programme. The whole country can be covered and that there is no other way. If the core mechanism of a coverage of a large section of people is in place, which is getting cashless service, a network of services and quality in place, then one can find a middle-level pricing between current insurance schemes and the Arogyasris and the Ayushman Bharats of the world. This scheme will become the middle tier, no frills, quality insurance plan which can be adopted by everyone, and that I think is definitely something to start working on. It will spur more hospitals to be built in tier-III towns.

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Published on January 14, 2020
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