At CII AGM, Govt promises much, with little debate

'Our future isn't 5% growth' Prime Minister Singh says

The government today declared, reinforced, explained and then pleaded its case for reform and change - all inadvertently, of course - on the first day of the Confederation of Indian Industries (CII) annual general meeting and national conference, even as the Opposition remained conspicuous by its absence.

Prime Minister Manmohan Singh, speaking to an industry chamber for the first time since the Union Budget, said that despite the mood of pessimism, he holds a "contrarian view". "Our future isn't 5% growth," he said, "Business cycles are recurrent themes in all textbooks of economics". And while the problems with the western economies mean that industry here will have to learn to operate within a difficult environment for some more time, Singh promised that the government will do its part and implored Indian Inc. to keep the faith.

A confident Singh, in an uncharacteristic but subtle jibe, recalled that during the preceeding period of high growth industry felt that the government's role in the economy would be limited, although now there has been a "rediscovery of the importance of the government".

That rediscovery includes demands from India Inc. to remove bottlenecks in the infrastructure sector, and the Prime Minister pointed to the purported early success of the Cabinet Committee on Investments (CCI), including clearances for important coal and petroleum projects. But "the full effect will be felt in the next few months", Singh added and said that the government "do even more in the coming months". It was reviewing to see what could be done in the next few months on foreign direct investment across sectors, he added, possibly with an eye on the rising current account deficit.

Industry minister Anand Sharma, in the session following the Prime Minsiter's inaugural, kept up the momentum, though the crowd within the cavernous venue had visibly thinned. With the CCI in place, Sharma stressed that there would be no further delays for major projects and promised more action in the coming week. "There will be quick dispensation for all projects," he added.

Even as the airconditioning at the venue barely kept the temperature comfortable, Sharma promised that the National Manufacturing Policy  "will transform India", while labelling the need to improve manufacturing a "national imperative".

On skill development, another theme that Sharma continued from the Prime Minister's address, the minister said that it was important to bring all government-backed initiatives under one authority. "I am in favour of creating an autonomous authority," he said, although an official of a key government-backed skill development agency, speaking on the sidelines of the event, did not think that it would help the overall skilling process.

The bigger fear for the national skilling thrust, however, remains the fact that industry, caught in a slow economic cycle, is unlikely to pay higher wages for more skilled workers. But Sharma pointed to the greenfield townships being created along the Delhi-Mumbai Industrial Corridor as projects that would change the manufacturing sector, creating employment.

For all the talk of growth, manufacturing and human resources, there was no mention of the labour troubles that have recently plagued industry, particularly the automotive sector. Instead, the emphasis remained on pushing an optimistic outlook. The current din of negativity, Sharma said, was akin to "short-term sensationalism".

A seemingly earnest KV Thomas, minister for consumer affairs, food and public distribution, subsequently went to explain, as he said "the salient points" of the Food Security Bill, underlining that it would play a key function in "revolutionising the food distribution system".

On the same stage, Ashok Gulati, chairman, Commission for Agriculture Costs and Prices, speaking after Thomas, argued that the government's plan to deliver a food to lacked sufficient economic logic. "As an economist (I see that) there is a lacunae in this entire system," he said. It was, however, agriculture secretary Ashish Bahuguna, incidentally the first bureaucrat to speak on the day, who put the conversation into a broader context. "We have food security," he said, "not income security."

Curiously, though, even as the government has set up a committee to ascertain the impact of retail FDI on the agriculture sector, there was no discussion on this, despite Bharti Enterprises' Rajan Mittal serving as the chair.

The lack of substance played through as Communications and IT minister Kapil Sibal came on after lunch, alongside Infosys' Kris Gopalkrishnan, occupying a stage with nine chairs. The other announced participant, lawyer Harish Salve, wasn't present. Nonetheless, Sibal made a case for centre, battling criticism that it has been unable to deliver.

"We have no answers to every problem that we face when running the country," he declared, after taking off his spectacles midway through his speech. A passionate Sibal argued that state governments must take the blame for failing in implementation of plans, programmes and laws, and that it wasn't unexpected that "virgin sectors" such as power and coal are currently embroiled in their respective "pregnant processes".

So far today, it has been the government making promises, which has mostly pleased industry, while some key debates have been ignored. Tomorrow, Congress general secretary Rahul Gandhi will open the proceedings. Will it be more of the same?