July 2016 issue of Policy Watch presents CII’s views and policy recommendations on CII's theme ‘Building National Competitiveness’

1. 1policy watch
this IssueInside
Message From the
Director General............ 1
Chandrajit Banerjee,
Director General, CII
Policy Barometer.......... 4
Industry Voices............. 9
CEO Speak............................................................................................2
July 2016, Volume 5, Issue 1
Policy
I
ndia aspires to achieve 9-10%
GDP growth in the medium term.
The target should be to drive
productivity growth across the economy - at
the national level, the level of the citizen
and at the firm level.
The task for Industry is to continuously
build its competitiveness through a
range of strategies such as quality,
sustainability, resource management and
process management. With this aspiration,
the CII Theme for 2016-17 is ‘Building
National Competitiveness.’
CII will work through six key areas of
focus to drive National Competitiveness.
These are Human Development, Corporate
Integrity & Good Citizenship, Ease of
Doing Business, Innovation & Technical
Capability, Sustainability and Global
Integration.
• Human Development: With 63% of
the Indian population in the working-
age group, there is high potential
to drive growth through focus on
education, skill development and
healthcare. CII will continue to progress
on skill training hubs and skill gurukuls.
It will also take up implementation
of the National Skill Qualification
Framework across the country. We
have already set up a Model Career
Center in Gurugram and two more are
coming up in Mumbai and Chennai for
placement services.
A major CII initiative this year would
be starting work on the CII University
in Amaravati, Andhra Pradesh.
• Corporate Integrity & Good
Citizenship: Industry needs to shift to
voluntary compliance with internationally
accepted standards and norms. CII’s new
initiatives in the area include instituting
CII Code for Fair Business Practices and
Adoption of Voluntary Standards, and
starting a course with the Indian School
of Business and GE for compliance
officers, apart from continued focus
on corporate governance through the
National Foundation for Corporate
Governance.
• Ease of Doing Business: It should
be easier to do business next year
as compared to this year. CII has
recommended introduction of processes
for alternate dispute resolution,
arbitration and conciliation. Better tax
administration can be boosted through
greater dialogue with Industry.
CII would work with Central and
State Governments for adoption of
technology, plug-and-play project
models, labour laws, and other
administrative processes. We would
build on our dialogue with trade unions
for progressive industrial relations and
draft guidelines on fair and responsible
workplace.
• Innovation & Technical Capability:
Productivity depends on technical
readiness and innovative capacity. CII
plans to set up ’India Design Center‘,
’India Industry IP Foundation‘ to
build more IP owners, and a national
Start‑up Center focusing on non-IT rural
entrepreneurship. A new CII service to
build capabilities in structure innovation
processes is also proposed.
• Sustainability: The global agenda
for Sustainable Development includes
a set of 17 Sustainable Development
Goals (SDGs) for 2030. CII would
promote sustainable practices including
renewables in energy mix, reforestation,
sustainable agriculture and green
practices. A national mission to
double energy productivity by 2030 is
envisaged. CII is initiating a programme
to enable all members to adopt
GreenCo rating in the next three
years.
• Integration with the World: India
needs to move from a defensive stance
to greater convergence with global
markets. CII would work to further
promote trade, investments and global
strategic alliances. Market entry services
to overseas companies, especially
SMEs wishing to invest in India are
to be offered. Indian companies must
enhance their capabilities in meeting
global standards and norms, and CII
would assist in building competitiveness
at the firm level
Through these six major pillars of
engagement for the coming year, CII
will foster stronger relationships with all
stakeholders to make India more productive
and inclusive. n
Chandrajit Banerjee
Director General
Confederation of Indian Industry
Dr. Naushad Forbes,
President, CII & Co-Chairman, Forbes Marshall
Focus: Building National Competitiveness

2. 2 policy watch
CEOSpeak
India’s medium term outlook is positive,
building on the growth drivers of an expected
normal monsoon, improved macroeconomic
fundamentals, and moderating interest
rates. CII expects GDP growth of around
8% for 2016-17, if external conditions
remain stable.
India needs to sustain a high growth path for
the next thirty years.The key to high sustained
growth is productivity - of each individual and
firm in the country. Sustained productivity
growth requires the movement of people
from lower value added activities (marginal
agriculture, informal services) into higher
productivity activities (modern manufacturing
or services). It requires investment by firms in
innovation, in doing new things for commercial
advantage. The Economic Survey makes
a telling point: if India's entire work force
operated at the same productivity as formal
manufacturing in the country, we would have
an economy 20 times our current size and
a per capita gdp level with South Korea
(USD 40,000).
Hence, the CII theme for the year is Building
National Competitiveness, at the national,
Industry and firm level. This would build an
enduring growth engine.
What are the drivers of sustainable increases
in productivity? Human Development is the
first area of engagement, including primary
education, higher education and vocational
and skills training.We have some 800 million
people under the age of 35, and 400 million
of them would enter the workforce over the
next two decades. Their energy and capacity
will be India’s best growth driver during this
period and this huge opportunity for raising
productivity, savings, and investment cannot
be missed. These young people are our
richest asset and must be able to contribute
to nation-building.
Education and skill development are
therefore of the highest priority, with Industry
as a capable and committed partner.This will
also empower historically deprived sections
of society. Mapping of skills to identify areas
of shortage is an urgent task, followed
by strategic initiatives to fill the gaps. CII
manages twelve Sector Skill Councils and is
working on policy advocacy for implementing
the National Skills Qualification Framework.
At the same time, we would need to create
employment opportunities on a large scale
for this incoming cohort.
The sub-theme of Corporate Integrity and
Good Citizenship is particularly close to my
heart. The great bulk of firms are inherently
honest, contributing daily to our national
development goals. A small number of
deviants capture the public imagination and
distort the overall image. CII has had a
voluntary code on business ethics for several
years. In March we relaunched this as a
simplified code, with just six simple principles
accessible to firms of all sizes, encouraging all
Members to adopt it. The code has received
a good response and the names of the firms
who adopt the code are on our CII website.
We emphasize that this is a journey that
begins with compliance and extends to good
corporate citizenship. Each firm will be at a
different stage in this journey, and our role in
CII is to enable and ease rapid progress.
The third focus area is Ease of Doing
Business, where much has happened due
to proactive efforts from the Government.
While administrative processes in areas
such as labour returns, e-biz, and single-
windows are improving, inter-ministerial
coordination and action at the State and
local levels is lagging. This is particularly
the case for small and medium enterprises,
which face multiple hassles in their day to
day operation. Initiatives reaching down to
the local administration level must be set
in place and CII will continue to work with
State Governments on this measure. We
have suggested that every State and the
Central office have a running list of EODB
issues, which we keep working on month
by month. At the end of the year, most
businesses should be able to state that it
is easier for them to do business and that
the business climate has improved.
Innovation and Technical Capability is part of
our theme this year as it is the source of long
run competitiveness of firms. No nation in the
past has developed without a strong emphasis
on building technical capability, be it Japan,
Building National Competitiveness
Dr Naushad Forbes
President, CII &
Co-Chairman, Forbes Marshall
Source: Africa Studioshutterstock.com

3. 3policy watch
CEOSpeak
South Korea, Singapore or China. This issue
has received little recent policy attention or
firm focus in India. We seek this year to raise
the quality of discussion of how best to build
technical capability and innovation.And as an
Industry, we must encourage our Members to
build a culture of innovation that takes place
everywhere and all the time.
Concerns regarding Sustainability in the
overall global, national and Industry
discussion are also gaining mindspace.
India’s commitments at the Paris COP21
are deep, including raising the share
of renewable energy, improving energy
efficiency and building more forest cover.
Industry must be an active participant in
these targets in order for them to succeed,
especially at the SME level. CII’s Centres
of Excellence are doing an excellent job
in sensitization and providing training and
support. With new initiatives, sustainability
can be a tool for increasing competitiveness
and saving on energy per unit of output.
Finally, we must continue on the path of
globalization, as a nation and as firms. The
global trade architecture is shifting towards
newer geographies as new regional trade
agreements are implemented. These also
include higher standards and norms for
trade. India is still grappling with trade
facilitation issues and needs to provide
better connectivity and lower transaction
costs in domestic markets. In our trade policy
stance, India should move from a defensive
posture of limiting foreign firms access to
our market to an outward orientation of
improving market access for our firms.
We believe that these six themes add up
to our overall goal of building national
competitiveness.The response from presenting
these thoughts to Members around the
country has been most gratifying. Our joint
endeavor can take us far. n
Source: Rawpixel.comshutterstock.com
Source: one photoshutterstock.com

4. 4 policy watch
Policy Barometer
Key CII Recommendations for
Building National Competitiveness
Human Development
School Education
Towards Governance and Effective Education Delivery:•
Standardisation of education delivery, learning platform for
teachers, absenteeism/availability, out of school children and
technology for education
Set up a national portal that will provide a framework––
with grade wise content and hot topics regularly updated
with the help of nodal institutions like NCERT and
educational companies
Leverage SCERT/DIETs as training hubs covering private and––
public schools for implementation of the framework
Mandatory training/refresher re-training for every––
teacher
Towards Education Excellence/Assessments:• Monitoring
conceptual learning, quality education in schools and teacher
enhancement programmes
Assess conceptual learning through independent––
agency(s) annually to check improvement
Gradually, Board exams need to be reformed towards a––
greater focus on conceptual understanding
Teacher Exchange programme between Public & Private––
sector and mentoring at each level can be a great
learning platform for teachers of Government schools
Public Private Partnership (PPP) for infrastructure––
development and providing basic facilities to schools
in rural areas. Government to announce Tax benefits/
subsidies to corporates that are willing to take such
initiatives for a social cause
Using accredited private agencies to administer Teacher––
Eligibility Test (TET) to test subject specific conceptual
understanding and practical classroom skills, during
recruiting
Each teacher to participate in research work related to––
innovative education methodologies
RTE & Ethics and Value in the Education System:• RTE,
effectiveness, infrastructure, accessibility and ethics
Fund allocation post new Government formation––
Compulsory guidelines for implementing RTE Act by––
Central Government
Coordination of initiatives between Ministries for example––
HRD, Labour,Women and Child Development, Panchayati
Raj, Rural Development, etc. Like NSDA (for vocational)
formation of an umbrella body that brings all these
agencies together to work towards a common goal
Defined framework and guidelines to measure the––
effectiveness of this initiative
Space allocated for schools under State development––
plan should be re-looked
Provide basic infrastructure with electricity, drinking water––
facility, road and connectivity in remote villages
Like Singapore, it should be mandatory for every student––
to volunteer time at a school – Each One Teach One
across a semester (Teach for India)
Internship with a political think tank to imbibe values––
and understand nuances
Higher Education
Improve quality by accreditation, compliance, and•
disclosure of information: NBA should be encouraged
to outsource its work to independent agencies which can
help it in carrying out the task of accreditation
Increase autonomy through decentralisation of•
institutions - more and more institutes need to be given
autonomy to set their own courses and make changes in
the curricula
Encourage academic research by bridging the gap•
between research and teaching - funding to CSIR system
(under the S&T Ministry) can be gradually routed through
educational institutes based on competitive bidding
Attract and retain good faculty by giving them more•
power and autonomy - Government institutes should be
allowed to appoint foreign nationals as permanent faculty
rather than as consultants for short durations, the way they
do currently since only permanent faculty can be expected
to have long-term vision for the growth of the institute
Facilitate easier access to funds:•
Allow educational institutions to access external––
commercial borrowings
Modify Companies Act to allow education institutes to––
float bonds to raise money
Include education sector in the list of ‘priority sectors’––
to enable easier lending terms by banks
Skill Development
Legislation of the National Skill Qualification Framework•
followed by pan India advocacy is important. One uniform
standard across India will raise the benchmark of training
and quality of skilled workforce

5. 5policy watch
Policy Barometer
Corporate Integrity and Good Citizenship
CII Model Code of Conduct – Ethical Business
Practices
Accurate Books and Records: The Company will maintain
accurate accounts and records which reflect the true and fair
picture of the company’s affairs in compliance with accepted
accounting principles and standards for financial reporting.
Bribery and Corruption: The Company will prohibit bribery
in any form in all its business dealings and will maintain strong
controls to prevent and detect improper payments. The Company
shall comply with anti-money laundering and terrorist financing
laws and report unaccounted cash or suspicious transactions.
Fair and Equitable Treatment: The Company shall not
unfairly discriminate on the basis of race, caste, religion,
color, ancestry, marital status, gender, sexual orientation, age,
nationality, ethnic origin or disability. The Company shall
not tolerate harassment, whether sexual, verbal, physical or
psychological against any employee.
Health and Safety: The Company shall provide a safe, clean
and healthy work environment.
Quality of Goods and Services: The Company shall strive to
ensure that its products and services meet the legally required
safety and quality standards.
Environment and Society: The Company shall strive to be
a good corporate citizen by promoting social welfare activities,
promoting sustainability and minimizing the adverse impact of
company operations on the environment.
Apprenticeship training is key to making youth ready for the•
Industry and improving their skill sets. It should be embedded
in curricula of all trades taught in ITI/ITC to ensure a healthy
balance of theoretical and practical knowledge
Skill development needs to be actioned at the ground-level and•
therefore it is imperative that all State Skill Missions under the
Chairmanship of Chief Minister are active and goal-oriented
One unified Labour Market Information System portal for•
job seekers and job providers through integration of all the
existing platforms
Health
Healthcare
Catalyze leveraging of unutilized public infrastructure•
Intensify work with the Ministry of Health & Family Welfare•
(MoH&FW) and the State Governments through the regions
Follow up action proposal for linking health insurance for•
Universal Health Coverage and work on coverage for OPD
/ diagnostics in health insurance
Devise robust PPP concessionaire agreement / contract models•
for primary, secondary, tertiary care, diagnostics, mobile health
focusing on increased participation from private sector for
strengthening infrastructure, services and referral system at
primary centers and secondary care
Increase seats in post graduate medical colleges and consider•
policy and regulatory reforms in medical education to enable
private sector involvement
Public Health
Immunisation•
Adopt innovative technology solutions for cold chain––
management, data collection, IT integration and
equipment
Deploy smart technologies and innovations such as cloud––
monitoring, remote sensing and advanced temperature
monitoring devices to counter challenges and evaluate
the impact of interventions
Diabetes Management and Care•
Equip primary care health centers with glucometers,––
glucose strips, ECG machine as well as with manpower
trained to manage diabetes
Sensitize physicians about eGFR formulas as well as––
promote healthy diets and highlight harmful effects of
tobacco and alcohol in schools and universities
Adopt technologies such as tele-medicine and m-health.––
These could play a larger role in screening and
management of DR in rural areas, reduce patient load
at the secondary and tertiary care institutions and save
the patient time as well as money
Train paramedics to screen for diabetes and the ensuing––
complications as well as on Basic Life Support (BLS) and
Advanced Cardiac Life Support (ACLS)
Medical Technology
Set up a single window authority for the regulation of•
medical technology and rationalize the licenses required to
operate a business in this sector (manufacturing, innovation
and marketing)
Staff the regulatory and administrative agencies with an•
independent set of appropriately qualified professionals. The
systems and processes should also be devised keeping in
mind the unique nature of the medical technology industry
Define a few hubs under the ‘Make in India’ aegis. Focus•
on enhancing the capability of designated manufacturing
hubs—specifically encour­aging logistic operators to improve
services, ensure quality power and water to be available, set
up training institutes and increase the efficien­cy of in-bound
and out-bound clearances. Additionally, medical device hubs
or clusters should have centralized testing, sterilization and
validation centres
Launch specific tax incentives and lower cost of finance•
for setting up manufacturing plants in line with competing
locations like Malaysia and Singapore. Rationalize the inverted
duty structure

6. 6 policy watch
Policy Barometer
Ease of Doing Business in India
CII believes that significant improvement in efficiency,•
transparency and governance can be brought in by large
scale adoption of technology in Government. There is a need
to shift from the existing system of sequential approvals
to simultaneous approvals through technology enablement
across Central and State Government
There is a need for risk profiling of industry sectors for differential•
exemption regime - for e.g. in case of Punjab, a set of 131 types
have been identified as low risk and are therefore exempted from
obtaining Pollution Control Board approvals.Also, it is suggested
to create a negative list of industries for strict approvals having
social, environmental and economic implication
It is recommended to have a pre-existing regulatory•
mechanism for specific land zones – this would involve
identification of specific industrial areas / estates wherein no
approvals shall be required for setting up of the business.
Such industrial areas would therefore be readily available
for setting up of businesses
There is a need for streamlining investment approval and•
provision of utilities – it is suggested to implement effective
single window mechanisms and legislations that ensure time
bound Government service delivery. It is important to facilitate
fast-track and transparent systems of approvals to minimize
processing delays and ensure timely disposal of issues
Efficient and effective enforcement of laws is critical to effect•
scalable improvement in Ease of Doing Business – it is
suggested that the Government should consider e-enablement
of all courts to make commercial dispute resolutions quicker
and more efficient
Innovation and Technical Capability
Technology and R&D
Continue existing R&D incentives for research conducted in-•
house and for R&D conducted outside in an institution:
R&D conducted in-house:–– Where the company
engaged in the business of manufacture of any article
or thing (other than specified in the Eleventh schedule)
is entitled to a weighted deduction of 200% of revenue
or capital expenditure (other than land or building)
incurred on scientific research
R&D not necessarily carried in-house:–– where the
assesse does not have an in-house facility, and the
same is carried out by any institution on behalf of the
assesse, then:
Any payments made to a research association,i)
university, college or other institution weighted
deduction of 175% is granted
Any payment made to a company weightedii)
deduction of 125% is granted
Reintroduction of Section 80-IB (8A) of the IT Act with•
MAT exemption as articulated by the DSIR in its November
2014 recommendation to Finance Ministry and GST waiver
for companies qualifying under Section 80-IB (8A) for cost
advantage to buyers of indigenous research output
Setup a programme funding mechanism similar to the US Small•
Business Innovative Research Program (SBIR) to encourage start
ups and small business to innovate newer technologies. In US
the SBIR programme is a highly competitive programme that
encourages domestic small businesses to engage in Federal
Research/Research and Development that has the potential
for commercialization. Through a competitive awards-based
program, SBIR enables small businesses to explore their
technological potential and provides the incentive to profit from
its commercialization. By including qualified small businesses in
the nation's R&D arena, high-tech innovation is stimulated and
the nation gains entrepreneurial spirit as it meets its specific
research and development needs
Identify five existing universities for research and innovation•
excellence, create a road map for 25 years to reach the top 100
universities. Ensure adequate funding to meet global benchmarks.
Create avenues to attract foreign students to create a diverse
and idea rich environment. The metrics for benchmarking of the
universities including publications, h-index, diversity, and patents
and commercialization of research for social good
A national campaign to attract talent especially women to•
science and technology, which would be necessary for the
country to realize its growth potential
Start-Ups
The definition of a start-up should be standard as it differs•
from the Centre to States when it comes to exemptions and
rebates. Some of them are subsets and some are contradictory.
Some States add additional qualifiers as well
The topic of venture debt should reach a maturity stage•
where a start-up can access it
Agencies such as SIDBI should provide funds for marketing•
expenses for business growth
Aspect of mentoring/coaching/training should be captured•
as we can have great ideas, access to funding, tax breaks,
incubators etc. but without some handholding in the execution
arena we’re likely to see more failures than successes
Share interim updates either through an e-newsletter or•
through workshops at different cities where success stories
can be shared to encourage greater participation in this
valuable movement
Translate the start-up action plan into those languages that•
feature on our currency note to enlarge the dissemination
footprint and make it more inclusive
There should be a clarity in regards to the specific Acts,•
under which Labour Laws are being interpreted. (Shops &
Est or Factory Act)
Clarity on compliance needed in pension must be there•

7. 7policy watch
Policy Barometer
Clarity on maternity leave and minimum wage to be there•
There needs to be a clarity on the 80% rebate on patent, as•
total patent costs include landscape analysis, drafting claim,
lawyer fee, filing fee, search and examine fee and exemption
document from the Indian Patent office, if filing outside of
India by Indian citizen
Procurement norms must be relaxed for service sector also•
There should be some elaboration on the kind of IP held by•
start-up and the independent control of its operations
Director’s liability post closure must be mentioned in the•
Bankruptcy Bill
Capital gains taxes in cross border deals should be clear as there•
are very few Start-ups which are single country now and most
are cross border in terms of funding, customers and people
Sustainability
Promoting Green Built-Environment
Municipal authorities should consider offering 5-10%•
additional Floor Area Ratio (FAR) to green building projects:
This incentive will encourage developers to adopt and promote
green buildings
Single window clearance for green building projects: Speedy•
approvals can be offered for green building projects, which
would help in timely execution of projects
Upcoming cities can adopt green cities concepts•
In the next 25 years, many new cities would emerge––
in India. There is also a potential to convert existing
cities into green cities. Municipal authorities should be
encouraged to follow green cities standards like IGBC
green cities rating system. This rating system enables
development authorities and developers to apply green
concepts and planning principles, so as to reduce
environmental impact and improve the quality of life
Encourage CII GreenPro certified products for green building•
projects
Availability and affordability of green building materials––
should be enhanced. CII in partnership with Underwriters
Laboratories (UL) has launched GreenPro certification,
which can help prospective designers and architects to
select certified green products
Waste Management, aligned with
Swachh Bharat Mission
Development of a National Waste Management & Recycling•
Programme
This would be an overarching framework to create and––
mainstream the organised waste management and
recycling industry
Structured frameworks and guidelines for recycling––
industry to be developed to integrate it with the existing
waste management rules and guidelines
Development of industry and sector specific recycling––
standards
Developing guidelines for management of plastic from––
e-waste
Promotion of PPP model for waste management and•
recycling
Establish facilities for reuse, recycling and reprocessing––
of wastes from various sectors should be encouraged
by providing incentives and ensuring the process for
setting up PPP facilities
renewable energy
Create regulatory certainty for renewable energy projects over•
longer tenures, such as 25-30 years, to encourage investment
by industry, and address state-level uncertainties about issues
like tariffs, land acquisition and grid evacuation
Ensure availability of low-cost, long-term and innovative•
financing mechanisms from multiple public and private sources
to finance the rapidly expanding sector
Power evacuation, grid integration and grid stability are critical•
issues facing the renewable energy sector. Government in
coordination with SLDCs and R&D institutions must develop
grid management and load balancing mechanisms for large-
scale deployment of renewable energy
Provide impetus to domestic manufacturing of renewable•
energy equipment vis-a-vis imports by enhancing the ease of
doing business in terms of setting up / expanding businesses
by timely availability of land and other essential infrastructure;
easy and rational licensing policies including single-window
and environmental clearances; production-based incentives;
working capital support; payment security mechanisms;
and additional support to revive legacy plants which have
become uncompetitive due to the rapid decline in the cost
of renewable energy, particularly solar
Create a level playing field for Indian renewable energy•
manufacturers within the country vis-à-vis international
competition by developing a set of internationally acceptable,
actionable, India-specific, industry-wide standards for the
manufacture / output product of solar panels as a first step
to eventually standardise the complete value chain. This will
also help lenders – banks, multilateral agencies, as well
as consumers, easily choose and finance projects against
standard parameters

8. 8 policy watch
Policy Barometer
Permit inter-state sale of power as cross-subsidy charges in many•
States is adversely affecting the viability of renewable energy
Stricter enforcement of Renewable Purchase Obligations•
regulations is a key enabler for the promotion of renewable
energy technologies by ensuring offtake of produced power,
thus guaranteeing return on investment
Renewable energy goods may be covered under GST and•
taxed at ‘zero’
Keep a strong focus on offgrid applications of renewable•
energy, especially for agricultural purposes such as solar water
pumps and the rural electrification programme to provide
accessible and affordable power to citizens
Encourage adoption of renewable energy processes for Smart•
City development as well as waste-to-energy management
for municipal and agri-wastes, including crop residues
Establish favourable tariffs for wind-solar PV hybrid systems,•
and promote energy storage technologies including thermal,
hydro and hydrogen storage to provide round-the-clock
reliable, grid-quality power
Sensitise the entire stakeholder chain – from policymakers,•
producers,utilities,and end-consumers (commercial,industrial and
residential) to appreciate the contribution of renewable energy to
the sustainability of India’s environment without compromising
on the pace of economic development, including
altering the mindset to focus on upfront costs instead of lifetime
ownership costs or intangible costs such as climate change
Corporate Sustainability – Non-Financial
Reporting
Large number of Reporting Frameworks: Mandatory/
voluntary disclosures for extra-financial parameters to be made
by Business has been steadily increasing around the world. Indian
companies are getting such demands from global investors or
buyers, and from evolving disclosure standards in India
While improving standards or requirements are welcome by•
Business, there are concerns with respect to duplication or
redundancy of information. CII recommends that different
extra-financial requirements made by SEBI in listing agreement
and by Companies Act 2013 should be consolidated to remove
redundancies and integrated to give a strategic overview of
the business and how the Board is steering the company
to create more stakeholder value
While increased transparency with external stakeholders is•
good, improvement in disclosures should be such that it
helps top management and Boards make better business
decisions that create more stakeholder value
This consolidation and integration of reporting frameworks•
should be synonymous with global frameworks with
adequately factoring in domestic conditions
Integration with the world
Moving up in the production value chain:• Till date,
India’s exports are highly dependent on primary goods
and labour intensive low value added manufactured goods.
India’s share in high value added or advanced manufacturing
exports is very less. It needs to invest in R&D and adopt
technologies to produce and export more high value added
technology intensive exports
Diversification of services exports:• More than 50% of
India’s GDP comes from the services sector. But when it comes
to services exports, India is highly dependent on the exports
of information technology (IT) and information technology
enabled services (ITeS). The large spectrum of India’s services
portfolio is unexplored in foreign trade. India needs to diversify
its services export basket. India also needs to leverage FTAs
for services exports, which hasn’t happened so far
Reform the standards regime in India:• Post liberalization,
in a low tariff regime, the focus has now shifted to non-tariff
and technical measures such as standards and conformity
assessment. In the new emerging trading system, standards
and technical regulations define the export potential and
overall competitiveness of an economy. It is very important
for manufacturers and services providers to comply with
the international best practices and standards to create an
eco-system of conformity
Removing some of the supply side constraints in•
India: India has a number of critical supply side constraints
that are actually containing India’s exports potential. These
include infrastructural deficiency, inadequate trade finance,
high logistic cost and inflexible labour laws. Government has
initiated several reforms to address these problems but the
entire effort need to be expedited
States' involvement in foreign trade:• As of now, under
the federal architecture of India’s governance, foreign trade
related matters are handled by the Central Government
whereas the actual production of goods and services takes
place in States. There is less intervention/involvement from
the State Governments in terms of overall foreign trade policy
formation. Higher participation of the State Governments is
required for trade facilitation, reform of standards regime
and more value addition in production cycle
Attracting export oriented Foreign Direct Investments•
(FDI): Recent data on FDI shows that it is mainly confined to
services, infrastructure and relatively low technology intensive
consumer goods. In other words, unlike China the nature of
FDI inflow into India has been largely market seeking. There is
very little foreign investment into export-oriented manufacturing
in India. The Government of India under its flagship campaign
‘Make in India’ must ensure more export-oriented FDI
More focus on trade financing:• India’s mainstream banking
and financial system is not fully oriented towards foreign trade.
There are not enough funds with commercial banks for trade
financing.Also the credit risk insurance and investment insurance
covers are not enough. As a result, many small and mid-sized
Indian exporters find it difficult to go for large export orders
or new products and markets for exports.

9. 9policy watch
Industry Voices
The education scenario in the country is going through tremendous changes post the Right to
Education Act, especially the primary education sector. We have achieved gender parity and curbed
quite effectively the dropout rates. It is praiseworthy that the HRD Ministry and Planning Commission
through the Sarva Shiksha Abhiyan have made a beginning in providing the complete infrastructural
requirements in rural schools. The country has seen in the last few years more number of primary
and upper primary schools sanctioned as per RTE norms. The concern now is to upgrade teachers
through continuous quality based training with upgraded curriculum in sync with present times. Enforce
examinations and assessments from Grade V instead of Grade IX so as to bring back the quality in
education. Schools must be graded and ranked so that appropriate efforts can be channelized and
targeted for improvisation in their quality standards.
N Kumar
Past President, CII; Chairman, CII Primary Education Council and Vice Chairman, The Sanmar Group
Skill development in manufacturing is the best possible way we can show the world that ‘Make in India’ is
a real possibility. The services sector benefited enormously from the availability of skilled manpower especially
in the IT and ITES sectors, and we must create the same advantage for manufacturing and make India’s
demographics our biggest strength. What we have achieved so far is a good start; moving from very little
to a sizeable amount is definitely commendable.
Pramod Bhasin
Chairman, CII National Committee on Skill Development and Chairman, The Skills Academy and Founder & Vice Chairman, Genpact
The gross enrolment ratio in higher education has now crossed 24%, as per the latest figures of
the Ministry of Human Resource Development. So, in terms of numbers and access, we have made
good progress. It is now time to focus on consolidation and improvement of quality. Professional
agencies such as CII should participate in accreditation of institutions and supplement the efforts of
the National Board of Accreditation and National Assessment and Accreditation Council. It is also
time for education sector to be accorded infrastructure status to facilitate easier access to funding
required for institution building.
Vijay Thadani
Chairman, CII National Committee on Higher Education and Vice Chairman &
Managing Director, NIIT Limited and Co-Founder, NIIT University

10. 10 policy watch
Industry Voices
The Committee on Integrity and Transparency in Governance came up with the Model Code of Conduct for
the CII members last year and 91 members have already adopted the Code. Beyond that, a Working Group
is engaged in working out guidelines for being a good corporate citizen, i.e. a responsible business entity.
This would cover corporate behavior towards environment, land acquisition, water use, health and safety etc.
CII in collaboration with GE and ISB will be running a residential programme on Compliance Management
to build a team of dedicated compliance officers needed in the country. To engage the youth and to give a
message that it makes sense to be ethical in life, CII is organizing lectures by its members to the students
and is also considering other initiatives.
Sumit Mazumder
Immediate Past President, CII and Chairman, CII National Committee on Integrity and Transparency in Governance and
Chairman & Managing Director, TIL Limited
The Government has displayed considerable commitment and rigor over the last two years to make it easier
to do business in India. Improving business facilitation at the State and local level is equally paramount, as
this is where the bulk of the regulatory hurdles are entrenched. To its credit, the Centre has been pushing
the States towards reforms; the first big step was taken in September 2015, when States were ranked on
98 parameters of Ease of Doing Business as per the Business Reform Action Plan.
The annual assessment of all States, alongwith the progress made by each in the area of Ease of Doing
Business will inculcate healthy competition within the States, irrespective of the inherent advantages and will
help the overall business environment in India. Already, healthy competition between the States is emerging
and this is encouraging.
Sunil Kant Munjal
Past President, CII and Chairman, CII Task Force on Ease of Doing Business and Arts, Heritage & Culture and
Chairman, Hero Corporate Service Limited
There has been a great impetus coming from the Government to fast pace the start-up growth in India. This
is an opportune time for the players in the Indian start-up ecosystem to establish their roots more firmly on
the ground and build a sustainable future. Currently many Central Ministries (MSDE, DIPP, DST, NITI, MSME
etc.) have proactively taken up the challenge to contribute in building the overall entrepreneurial landscape,
but a more focused approach and better convergence of start-up activity through a single ministry could
work in the benefit of all stakeholders. The States should also independently set up systems and processes
in place to nurture State level entrepreneurs and also become competitive at the national level.
S Gopalakrishnan
Past President, CII; Chairman, CII Start-up Council and Co-Chairman, Task Force on CII University and
Co-Founder, Infosys Limited and Chairman, Axilor Ventures
The basic issue in India’s health system is that although the network of delivery settings is in place, each
is working in isolation, leading to imbalance in the patient inflow catered to by these healthcare facilities.
There are a few areas in which the private sector can join hands with Government to augment supplies
and catalyze quality in healthcare delivery especially in terms of new technologies, procedures, infrastructure
and capacity building.
Dr Naresh Trehan
Chairman, CII National Healthcare Council and CMD, Medanta – The Medicity

11. 11policy watch
Industry Voices
I am encouraged by the forward momentum shown in policies such as cutting pendency of patent filing for
start-ups to two and a half years. The next step on patents would be to ensure pendency is brought down
to two and a half years across the board. Programmes such as the Uchchatar Avishkar Yojana encourage
university research with clear outcomes and industry partnerships – a much needed direction! Going forward,
we need to build on this foundation by pursuing programmes with direct research funding to small businesses
from the Government.
Dr Gopichand Katragadda
Chairman, CII National Committee on Technology and Group Chief Technology Officer, Tata Sons Limited
Economic growth and environmental sustainability go hand in hand. Industry in India has demonstrated leadership
in all aspects of sustainable development. India has over 3.6 billion square feet of registered green buildings
which places India as the second largest country in the world with registered green building footprint. Buildings
are substantial users of energy and green buildings can make a significant impact on saving resources.
CII has the unique distinction of launching Green Company (GreenCo) rating system, the first of its kind in the
world. 175 companies are working on GreenCo rating and 25 companies have already reported savings of Rs
491 million / year per annum. CII has pioneered a rating system for green products known as GreenPro. A
large number of companies have shown interest in this rating. CII has facilitated annual recurring savings of
over Rs 2,800 million by conducting over 1,500 detailed energy audits. Further, world class energy efficiency
initiative in Engineering, Cement, Pulp & Paper, Sugar and Power plants is evoking excellent response. The
Government of India is promoting renewable energy and sustainable development. Industry in India has to
play a vital role in embracing sustainable development. CII will continue to focus on various green initiatives
and facilitate the Indian Industry to emerge as a global leader in sustainable development.
Jamshyd N Godrej
Past President, CII; Chairman, CII Climate Change Council and
Chairman & Managing Director, Godrej & Boyce Manufacturing Company Limited
Recent trends have shown significant strides to actively encourage production of clean energy like solar and
wind. The confluence of Government and industry objectives has come at the most appropriate time when
organizations globally are taking the leap towards low carbon, climate resilient sustainable growth. While
the Government has been supportive of the sector, organizations have showcased their commitment and
prowess by helping India cross 26.8 GW of wind and 7 GW of solar power installed capacity as of May
2016. Progressive policies to scale up renewables as a mainstream power source have been driving down
the cost of energy. Technical and financial innovation are reducing the cost of constructing and operating
projects while providing India with a sustainable power source with cost certainty.
We are also confident that the partnerships forged by the Government with global organizations to enhance
cooperation on energy security, accelerating renewable energy development and mobilizing investment for
clean energy, will help us achieve the 175 GW power capacity from renewable energy resources by 2022.
Ramesh Kymal
Co-Chairman, CII National Committee on Renewable Energy and
Chairman & Managing Director, Gamesa Wind Turbines Private Limited

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Industry Voices
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In the backdrop of continuously falling exports for such a long period, there is enough reason to reassess
our policy environment for foreign trade. While external environment is likely to remain unfavorable, Indian
industry needs to be capacitated by addressing some of the major constraints. There is a need to tap
newer markets, particularly those with whom India has signed free trade agreements (FTAs). The challenge
is how to enhance competitiveness of Indian industry in global market by producing high value added
products. We also need to diversify our services exports basket as over dependence on one sector such
as IT enabled services makes our situation always vulnerable. The existing incentive system should be
revamped to strengthen export competitiveness of domestic industry, so that, we can reverse the current
trend of continuing falling exports.
Sanjay Budhia
Co-Chairman, CII National Committee on International Trade & Trade Policy and Managing Director, Patton International Limited
India is currently going through a tough time on the merchandise exports front as it has witnessed a
negative growth for the last 17 months. This has been posing a major challenge to both policy makers and
industry members. Ever since the economic crisis post-2008 the overall demand in the major developed
markets has not picked up. The slowing demand has pulled prices down and restricted exports in both
value and volume terms. On the other hand, customer preference for goods and services has changed
dramatically in the last one decade. This requires exporting countries to produce more value added
goods and services that require skills, research and development, technology and a strong standards
ecosystem. The exporters of conventional products and services are slowly losing the market. There is a
third dimension, too. The changing global trade architecture, resulting from mega-FTAs, is likely to have
a major influence on future trade pattern. Both Indian industry and Government needs to respond and
prepare to face this new emerging challenge.
G K Pillai
Chairman, CII National Committee on International Trade & Trade Policy and Chairman, Tata International Limited