The document discusses several comments made by FICCI (Federation of Indian Chambers of Commerce and Industry) on India's economic performance and policies. Some key points: 1) FICCI comments that India's GDP growth of 7.3% in 2014-15 was encouraging and in line with expectations. Further reforms are expected to improve growth going forward. 2) Issues like weak demand, farm output risks from low monsoon forecasts, and slow private investment are still concerns hampering stronger growth. 3) FICCI urges the Reserve Bank to cut interest rates to encourage investment and boost growth. 4) FICCI welcomes the government's launch of new social security schemes to expand financial

1. • FICCI COMMENTS ON GDP AT 7.3% IN 2014-15
GDP growth of 7.3% in 2014-15 is encouraging and is in line with broad expectations. The Government’s
progressive stance on economic reforms and on improving ease of doing business has helped in creating
a positive sentiment over the past one year. With this holistic approach on reforms, we expect GDP growth
to improve further in the next 6-12 months. In fact, results of FICCI’s latest Economic Outlook Survey pegs
GDP growth at 7.8% in the current fiscal year.
While economic conditions have been mostly benign since the beginning of 2015, some downside risks
continue to pervade. Agriculture output may be impacted with a sub-normal monsoon forecast this year,
weak demand remains a persisting concern and a firm turnaround in the domestic capex cycle is awaited.
Further, results of FICCI’s Business Confidence Surveys indicate that companies are still apprehensive
about undertaking fresh investments and high cost of credit remains a major constraining factor for them.
Also, the survey results indicate strain on parameters like profits and exports, which is also reaffirmed by
the actual quarterly corporate results.
Inflation, which was a major concern factor has been on downward trajectory. We hope that Reserve Bank
will cut the repo rate by 50 bps in the monetary policy review to be announced next week. Also, a cut in
the CRR by 50 bps can be looked at to allow for effective monetary transmission by banks in the form of
lower lending rates for industry and consumers. This will give an immediate respite to the manufacturing
sector and help in stepping up investments.
• FICCI COMMENTS ON WPI DATA FOR APRIL 2015
WPI for April 2015 is once again in the negative territory for the fifth consecutive month. Likewise, CPI
data too has seen continuous moderation over the last few months. The moderation in price rise has been
broad based and seen in major food articles, fuel as well as manufactured products. Slight upside risk does
persist on account of unseasonal rains and possibility of below normal monsoons. We are sure that the
state and central government agencies will make all efforts in balancing demand and supply and
addressing structural bottlenecks to control rise in food prices due to any such exigencies.
Additionally, the IIP growth for March 2015 has slowed down over the previous month, which indicates
that a firm turnaround is yet to take place. We look forward to another round of downward revision in
the repo rate and subsequent transmission of same by the banks to encourage on-ground investments
and build on the growth momentum.
JUNE 2015

2. • FICCI COMMENTS ON THE LAUNCH OF INSURANCE, PENSIONS SCHEMES BY PM MODI
Welcoming the launch of the three new social security schemes by the government, FICCI said that as part
of the financial inclusion process, this is a very important step forward in our country’s ability to provide
adequate and affordable social protection to all citizens and widen the financial security net to the
unorganized and underprivileged sector. The launch of these three schemes also highlight the
government’s deep commitment to further the cause of financial inclusion and provide social protection
to all segments of our society.
The government should ensure that as part of its outreach programme, details on the benefits of these
schemes reach out to the maximum number of people as has been the case with the Pradhan Mantri Jan
Dhan Yojana. FICCI stated that it would partake in the outreach programme of the government and would
extend its full support in promoting enrollment under these insurance schemes by connecting with its
members and requesting them to encourage their employees to benefit from these schemes. We would
also connect with our member bodies and regional chambers spread across the country to permeate and
share the information further.
FICCI believes that this would go a long way in promoting a financially secure society wherein people feel
confident in putting their money in reliable schemes, secure their family from life’s uncertainties and
provide for their non-earning years.
• FICCI COMMENTS ON THE PASSAGE OF THE COMPANIES (AMENDMENT) BILL, 2015
FICCI congratulates the Government on passage of the Companies (Amendment) Bill, 2015 in the Lok
Sabha. Complementing the Government’s commitment to the reform agenda, FICCI said that the industry
is appreciative of the efficient manner in which the Government is looking to address the issues that have
been raised by FICCI vis-à-vis implementation of the Companies Act, 2013. In the interest of facilitative
regulatory climate in the country.
• FICCI COMMENTS ON PASSAGE OF THE GST BILL IN LOK SABHA
Welcoming the passage of GST bill in Lok Sabha FICCI said that we are delighted to note the passage of
GST bill in the Lok Sabha and hope for its clearance in the Rajya Sabha in the current Parliament session.
This is an extremely important reform measure which is needed to bring about efficiency and
transparency in the indirect tax system and to enhance competitiveness of our industry. A unified
common national market which the GST will help establish will bring in long-term benefits to all –
government, industry, traders as well as consumers.
• FICCI ASKS FOR A CUT IN INTEREST RATES TO PROPEL DEMAND AND INVESTMENTS
Ahead of the release of bi-monthly monetary policy of the RBI, FICCI urged for a cut in the policy rate and
further easing of monetary policy. Revival of capex is critical to push the growth further and create new
employment avenues. While government has given a push to public investments in infrastructure, private
investments are still languishing on account of low capacity utilisation and weak consumer demand.
Successive rounds of FICCI’s Business Confidence Survey show that investment outlook remains cautious,
with majority participants citing availability and cost of credit to be a major constraining factor. Reduction

3. in lending rates by financial institutions is the need of the hour, which has also been acknowledged by the
Finance Minister and the Chief Economic Adviser recently. With inflation largely under control, we expect
the Central Bank to reduce the repo rate by at least 50 bps to expedite revival of private investments and
demand for housing, automobiles and consumer durables. A cut in CRR by 50 bps is also desirable as it
will release liquidity in the system and enable effective transmission into lower lending rates by banks.
• LACK OF QUALITY INFRASTRUCTURE, SHORTAGE OF ADEQUATE SKILLED MANPOWER AMONG
KEY ISSUES HAMPERING THE GROWTH OF F&B SERVICE INDUSTRY
The lack of quality infrastructure and shortage of adequate skilled manpower are among the issues
hampering the growth of the Food & Beverage (F&B) service industry in India. The other issues faced by
the industry are high real estate costs, the large number of licenses required to operate in the sector and
a plethora of taxes.
FICCI said that the Indian F&B service industry is one of the most vibrant industries that has seen
unprecedented growth in the recent past and continues to expand rapidly. Hence understanding the
opportunities available in this sector, FICCI last year decided to create a subcommittee within the Retail
division of FICCI. This subcommittee aspires to create a focused thought-leadership for this sector. FICCI
will endeavour to voice the concerns of this niche sector to the right authorities. He added that the
investment scenario also looks bright for the sector.
• RESTORATION OF INVESTOR CONFIDENCE AND ESTABLISHMENT OF ‘BRAND INDIA’ ARE MAJOR
ACHIEVEMENTS OF GOVT. IN ITS FIRST YEAR
FICCI stated that the main achievement of the government in the past year is the creation of a positive
business sentiment, restoration of investor confidence and establishment of ‘Brand India’, by framing
policies that rest on transparency and fairness. Terming the government’s pro-industry label as “pure
rhetoric”, FICCI said that without growth it would be impossible to provide jobs to the 23 million young
people who descend in the job market every month. The slowing down of rural and urban demand was a
cause for concern, she said that government spending on infrastructure projects must rise significantly to
fuel the industrial economy.
FICCI said that no government at the Centre has worked so hard in one year to reverse the spiral of
negativity and brought in policies that will spur demand and growth in the very near future. FICCI,
however, believes that the government should now focus on raising farm productivity and formulate a
water policy that ensures efficient and fair distribution of water for agriculture, industrial and domestic
consumption.
On the question of Non-Performing Assets (NPAs) in the infrastructure sector, FICCI said that
infrastructure-related companies are over leveraged and would be unfair to bundle such projects which
have accumulated NPAs due to fraud and other corporate malpractices. There is a need to sort out
regulatory issues and unless that is done credit off take will not pick up.
On the tourism front, the government’s e-visa initiative has seen huge upsurge in demand, said Dr. Suri
and added that the ‘Incredible India’ needs to be revisited to building tourism-related infrastructure to
meet the needs of inbound travelers.
FICCI is encouraged by the policy direction and tone set by the new government. While the government
has laid a strong foundation for sustainable higher growth by laying out a sound roadmap, implementing

4. the same in true spirit remains the key challenge. Private investments need a further push to gain
momentum, which can be achieved through timely implementation of GST, clearance of land related
hurdles, absolute clarity in tax policies, reduction in interest rates and stimulating consumer demand. We
are hopeful that the government will focus on accomplishing the work-in-progress agenda through
continuous policy action and reforms.
• CONVERGENCE OF INTEREST AND ASPIRATIONS BETWEEN INDIA AND APEC MEMBER
ECONOMIES
FICCI said that India is positioned well to take a place at the high table in APEC, thanks to the vigorous
policy of external engagement by the Indian government. India’s engagement with China, an influential
member of APEC, has strengthened. The US-India Joint Strategic Vision for the Asia-Pacific and Indian
Ocean Region unveiled during the recent visit of President Obama to India, has mentioned that the US
welcomes India’s interest in joining APEC. India’s close and rapidly growing political, economic and
strategic ties with many of the other APEC economies like Australia and Japan are all encouraging signs of
an endorsement of India’s efforts to join APEC.
India has identified manufacturing, infrastructure, financial inclusion, cleanliness and digitized delivery of
services to citizens, the pillars of its ambitious agenda of transforming India. A closer integration between
India and the APEC can boost India’s investment prospects, establish links with global supply chains and
bring in APEC as a partner in India’s development agenda.
In many areas of governance like services, government procurement and competition, India’s progress is
quite comparable to those of APEC developing economies. The APEC has also been an incubator of ideas
working closely with the private sector with the APEC Business Advisory Council (ABAC) forming an
integral part of its consultative mechanism. This experience as well as the APEC model of planning and
implementing its programmes through networking, capacity building, sharing of and developing best
practices represents an important learning curve for India’s policy makers and industry.
• FICCI LAUNCHES ‘DIGITAL BHARAT’ SERIES
FICCI has stated that it was encouraging that the Indian government is prioritizing technology as an
enabler for the transformation and development of the country. However, to reach the desired goals, it
is extremely important to develop an environment which nurtures Government-Industry dialogue and
partnerships. We need to understand the nature of the opportunities being offered by the government
programs like Digital India and Make in India and therefore FICCI has initiated the digital bharat series as
a platform for having transformative exchanges and deliberations.
The digital revolution now stands at the cusp of a transformation, with the government having laid out its
vision of a digitally enabled India over the last one year. The success of both “Digital India” and “Make in
India”, will ride on the back of strong telecom ecosystem, digital infrastructure and industry’s link in the
value chain.
• INDUSTRY MEETING WITH THE COMMERCE MINISTER ON FDI IN E-COMMERCE
FICCI appreciates the move by the government to initiate the discussion on FDI in E commerce. It is critical
to understand that within E commerce there are two models of operations- Inventory based or market
place. By broadening the scope of foreign investments in E-commerce to include inventory apart from

5. marketplace, the government would be placing the Indian industry at par with other emerging markets
where both marketplace and inventory models are able to operate freely. As the policy is reviewed, it is
important to focus on development and encouragement of MSME sector which is certainly the driving
force behind the vision of ‘Make in India’. This should ensure domestic manufacturing gets impetus.
FICCI feels that FDI should be allowed in B2C e-commerce, with a focus on sourcing from manufacturers
and in a phased manner. The idea is to emphasize that there has to be a parity between online and offline
retail policy with respect to FDI levels.
FDI in ecommerce is expected to bring in following benefits to the stakeholders:
• Would create new global markets for small businesses/entrepreneurs and help them scale at
almost no cost
• An open and de-regulated E-commerce sector would mean greater access to wider and diverse
base of consumers and retailers
• Generate employment as well as spur investment/innovation in supply chain management,
warehousing, logistics services and other ancillary sectors
Further, FICCI feels that to encourage domestic manufacturing, there could be a prescribed percentage of
sourcing from domestic enterprises and the limit could be based depending on the level of FDI. It is crucial
for the government to address this issue in a more detailed approach of consultations with groups of
stakeholders.
• FICCI SUGGESTS SHARING OF THE SUBSIDY BETWEEN CENTRE AND STATES TO REPLACE OLD
DIESEL VEHICLES
Suggesting the options for vehicle replacement, FICCI said that there are many ways of implementing such
policies. While there is an option of Central Government directly providing the subsidy for replacement
of old vehicle, however, since the cost of such a subsidy will be high, 50% of this subsidy could be shared
by the States. Further, the subsidy for replacing old vehicle could be implemented in phases too depending
upon the age of the vehicle. However, any robust programme would require that stringent conditions are
imposed and enforced for the new vehicle too, that would replace the old vehicle.
Besides, FICCI suggested that non-fiscal options are also effective in many cases to bring down the
pollution levels significantly. Creating low-emission zones as is the case in several countries like China,
Germany etc. have proved to be very successful. Government could create low emission zones to reduce
pollution levels in populated areas. Low emission zones are regions in which high-emitting vehicles are
either prohibited from operating or charged a fee for entering. The establishment of such zones can
provide strong additional incentives to owners of high-emitting vehicles to take advantage of fiscal
subsidies and replace their vehicles.
• LEVEL PLAYING FIELD TO PRIVATE SECTOR IN DEFENCE: A BIG PUSH FOR MAKE IN INDIA
FICCI congratulates the Government of India for taking definitive steps towards providing a long awaited
level playing field to private sector engaged in defence production viz-a-viz Defence PSUs and Foreign
OEMs. FICCI’s consistent efforts to champion the provision of level playing field to the Indian private sector
are bearing fruit.
FICCI reflected that while provision of a level playing field will provide requisite impetus to the “Make in
India” campaign and promote higher levels of indigenisation, the Government’s initiative will deliver the

6. intent when holistically accompanied with commensurate reforms in the current Acquisition process,
addressing risks at the hands of the Indian Industry players, Industry friendly Offset Policy and the Defence
Export Procedure.
• FICCI CHIEF WANTS KOREAN FIRMS TO INVEST IN INDUSTRIAL CORRIDORS, NMIZS & SMART
CITIES
FICCI pointed out that Korea was one of the first countries to realise the potential of India as a
manufacturing destination. Korean investment in India is concentrated mainly in the manufacturing sector
which accounts for 86%, with wholesale and retail trade 6%, construction 1.2% and financial and insurance
activities 1.3%. The Korean companies’ faith in the India growth story is clearly reflected in the choice of
India as a launch pad for Korean global automotive offerings, including an export hub for Hyundai Motors
which has been exporting a significant chunk of its ‘Made in India’ vehicles.
The other major Korean brands such as Samsung and LG have made significant connect with Indian
consumers. Their model has been to operate through wholly owned subsidiaries with large scale
investments, which allowed them to operate on economies of scale and establish their brand image at
early stage.
FICCI said that Korean companies are bringing in capital, cutting-edge technology and generating
employment in India. According to Korean Exim Bank, Korean companies have invested more than US $
3.5 billion in India till December 2014 and 641 Korean companies have invested in India. However, when
you consider Korea's worldwide investment which is estimated to be about $270 billion, there is a scope
to invest a lot more in India. We look forward to more Korean investments in Delhi Mumbai Industrial
Corridor, National Industrial Manufacturing Zones and Smart Cities as well as in areas other than
manufacturing such as IT and services.
• FICCI WELCOMES PATH BREAKING DEFENCE COOPERATION BETWEEN INDIA AND SOUTH
KOREA
FICCI believes that South Korean Industries have developed a lot of cutting edge technologies, products
and systems in cooperation with and facilitated by the Governmental agencies. Many of these are apt for
adaptation and building in India for Indian Armed Forces through co-development and co-production
under the Make-in-India initiative of Indian Government. The mutual trust and friendship will help in
creating an environment to encourage Korean Companies to participate in ‘Make in India’ initative for co-
development and co-production.
FICCI is of firm view that Korean companies will play a strategic role in partnering with Indian companies,
especially private sector, towards development of Shipbuilding, Submarine construction, Design &
Construction of Landing Crafts Mechanised beside a variety of Marine Equipment & Sytems, tracked
vehicles, Mine Counter Measure vessels, Land based Artillery rocket systems, thermal imaging systems,
Propulsion systems for Armoured vehicles, to name a few. FICCI hails PM Modi for appreciating the ship-
building capacity of South Korea which can eventually become driver of our growth under join
collaboration efforts. Cooperation in shipbuilding will help Indian companies to enter into global supply
chain and gradually enhancing our position in global market.

7. • ONLY A STRONG IPR REGIME CAN INCENTIVIZE COMPANIES TO INNOVATE AND INVEST IN INDIA
FICCI said that increasingly Indian companies are exploring and selecting Switzerland as their operational
and business base. Outside the EU, Switzerland is positioned amongst India’s top five trading partners in
the world and India is one of Switzerland's main partners in Asia. Most promisingly, the ongoing economic
slowdown being witnessed by European economies has not dented the healthy trade trends.
FICCI stated that Swiss investments into India underlined the confidence reposed by Swiss investors in
India’s growth story. Our business collaborations have been growing robustly. The existence of close to
200 Swiss companies in India and the presence of many leading Indian companies in Switzerland, speak
for itself. Swiss technologies for treating waste water, waste collection, preventing harmful emissions,
urban water management could be beneficial to India’s developmental needs.
FICCI underlined the importance and role played by tourism and hospitality in bringing the much needed
awareness and business understanding amongst the people of the two countries. A lot has been done.
But the possibilities are limitless for us to collectively work towards unshackling the hitherto unrealized
sectoral potential.
• TO BOLSTER THE ENERGY TRADE BETWEEN INDIA AND THE AMERICAS
It has become important to bolster the energy trade between India and the Americas in sync with our
energy security imperatives and need of diversifying India’s oil and gas supplies. India imports 78 per cent
of its crude oil from overseas which makes the Americas’ prolific oil and gas reserves a precious resource.
This is the FICCI policy intake behind a strong private sector presence in the high-powered delegation
which visited Mexico and Colombia. Important areas of cooperation include joint development offshore
and onshore oil and gas fields, partnership in hydrocarbon engineering services and understand the
country’s fiscal regime to explore opportunities of business partnership among both the countries. The
Mexican and Colombian energy sector is likely to be a significant partner in the near future. India’s
strengths and extensive capabilities in refining capacity, engineering services and project execution also
enable a greater cooperation with Mexico and Colombia.
For more details contact FICCI Membership
at tripti.kataria@ficci.com