Bolder reforms needed for Make In India's success: Banmali Agrawala

Interview with President & CEO, GE South Asia

'Make in India' is more important for small and medium scale enterprises than for large companies. While the government is willing to help, the next phase is to translate that intent into action. Banmali Agrawala, GE South Asia president & CEO, tells Sanjay Jog how India is positioned to achieve this. Excerpts:

Will Make In India succeed with slow pace of reforms?

I would not hinge the entire success on reforms. We are a democratic country; the bolder the reforms, the faster and more impactful will the entire Make in India be. However, you have to balance economic development and the social and political side of that.

How prepared is GE to be an active player in the Make in India initiative?

The message the government is giving out is - come and make in India, manufacture in India. This is very refreshing. Second, there is a golden opportunity. India is one bright spot in the global economy and is growing. You have an opportunity and, you have a government willing to help. A very good combination. The next phase is to translate that intent into action and credible steps. That is what's everyone is waiting for.

We clearly recognise India has a great opportunity to manufacture, innovate and do all of that. For large companies, these small hurdles might not matter, as they have the people and financial resources. That's not the case with smaller companies.

So, Make in India is more critical for small and medium-scale firms than for large companies. How do you make the life of a small-scale unit easier to file taxes and get permit, clearances, etc. In GE, I employ 100 people to do all that. Small enterprises might not be able to. If you look at the new dimension of manufacturing, the big guys will set up the unit but, it is not as labour-intensive as in the past. In the supply chain, you have a lot of opportunities for small and medium companies. If they do not succeed, nor will large ones.

What are your expectations from the Budget?

The Budget is always about capital allocation. We have a windfall from low oil prices; so, more capital is available. Let us see how the government uses that capital to spur growth. It would be good to see some of that used for building infrastructure and then address the financial sector.

How do you see the recent initiatives in the energy sector?

I would say the tariff (rate) policy cleared by the Union Cabinet is forward-looking. The first thing is, somehow the Centre should be able to convince the states through incentivising and penalising their behaviour. Also, you cannot say that my tariff has to go down even if input costs are going up. So, politically, the understanding of this space needs to be much better.

There is a massive opportunity to eliminate inefficiencies such as distribution losses. For example, if tariff needs to be increased by, say, 20 per cent, eliminating inefficiencies alone can bring down costs by around 15 per cent.

One often hears the statement that we have achieved self-sufficiency in generation. I would contest that because the country needs a lot more power. Our per-capita consumption is still low, and our unmet demand is very high. For instance, look at the number of diesel generation sets being sold. We need to continue to invest in more generation. The whole focus on renewable energy is phenomenal, to put India on the global map. How you integrate renewable energy into the grid system is crucial, because renewable power is unpredictable and infirm. You need to have some storage capacity to make renewable power more useful.