Shift in focus towards social sector, SMEs a welcome move: Panel

There has been a gradual shift in the Gujarat government's focus on issues relating to social indicators, skill development and small and medium enterprises (SMEs), according to a panel of experts at the Business Standard Gujarat Round Table Conference 2014.

The discussion on "Gujarat under new leadership", saw a panel of industrialists, business consultants, entrepreneurs and academicians, debating on issues such as, probable shift in growth focus for the new team at the helm of the government, increased focus on a SME sector, labour and skill development challenges, among others.

Some panelists agreed there had been a shift in focus by the new leadership, led by the state's first woman chief minister. Others chose to disagree, stating the government was following a set trajectory.

Inaugurated by chief guest Saurabh Patel, minister for finance, energy and petrochemicals, government of Gujarat, the round table saw a panel discussion among Firdose Vandrevala, executive vice-chairman, Essar Steel; Pankaj Patel, chairman and managing director, Cadila Healthcare; G Raghuram, professor-public systems group, and dean-faculty at Indian Institute of Management, Ahmedabad (IIM-A); Sunil Parekh, corporate advisor and founding curator/mentor of Global Shapers Initiative by World Economic Forum (WEF); and Amit Patel, group managing director, Sintex Industries.

Terming the state government's efforts 'neo-liberal', Parekh said there was a certain continuity in the state's growth focus, wherein industrial and economic growth was being pursued with an intention to collect taxes and redistribute it for social justice in a focused governance model.

Calling for a "mission mode approach to the social sector", Raghuram expressed concern that the same amount of detailing was not given to the social sector as was given to industrial development by the previous government.

Disagreeing with Parekh, Vandrevala maintained Gujarat was lagging in the human development indices and there was a certain shift of focus, since the recent state Budget saw increased in allocation for the social sector.

Seconding Vandrevala, Amit Patel of Sintex said, "A gradual change towards upliftment of the state is always welcome."

Pankaj Patel of Cadila Healthcare opined it had been some time since Gujarat had begun moving in a particular direction and the new leadership was following the same direction. Patel maintained there was no major change in the government's focus on the SME sector, except for some additional schemes.

Vandrevala suggested the state could take a cue from Germany, where over 50 per cent of gross domestic product comes from SMEs. Parekh alluded to the state's policies for SMEs not aiming to become big. "SMEs by nature do not aspire to become big," he said, adding that of the last year's industrial output of Rs 11 lakh crore in Gujarat, SMEs contributed less than 15 per cent.

The panel also deliberated on shortage of skilled personnel and issues of migrant labour, apart from land reforms. While the panelists agreed migrant labour was not much of an issue at present due to local labour being better off, they stated the same could become a concern for the state in future.

Parekh, Vandrevala, Pankaj Patel, Amit Patel and Raghuram agreed SMEs in the state should be incentivised to innovate and move towards value addition.

In terms of land reforms, the panelists agreed land was going to be a challenge for the state government and called for innovative steps, as well as better utilisation of coastal and arid areas. For better land allocation and market-determined prices, the panelists suggested the implementation of zoning in the land acquisition process, which would also restrict sale of land for non-industrial purposes, on the lines of special investment regions.