NEW DELHI: In an interview with IANS, Anand Mahindra, president of the Confederation of Indian Industry (CII), says after several bad years, demand growth is visible across several sectors and the buoyancy is expected to continue. But external constraints along with shortcomings on the domestic infrastructure front - such as high cost of power and poor quality of roads -- are impeding growth and competitiveness of Indian companies, he said. Here are excerpts from the interview: Q: What is your expectation of India's growth prospects during 2003-04? A: I am personally very bullish on India's growth prospects. CII has forecast that GDP (gross domestic product) growth will be in the range of 6.5 to 6.8 percent (up from 4.2 percent logged in 2002-03). Agricultural growth is expected to rebound after last year's dismal performance. The news on the spread of the monsoon this year is encouraging. GDP growth from the agricultural sector is likely to be in the range of 4.0 to 5.5 percent. More importantly, industry is on a recovery path. After several bad years, demand growth is visible across several sectors and this buoyancy is expected to continue. Q: In the light of declining economic growth over the years, what is impetus required to achieve a higher rate of growth and make Indian companies more competitive globally? A: Indian companies are already in the process of restructuring as new competitive threats have emerged in the era of liberalisation. Even though tariff barriers have declined significantly, imports have not swamped the Indian markets. In fact, India now has a current account surplus as the export of services has boomed. There are certain external constraints faced by Indian companies that impede them from further enhancing their competitiveness. These are primarily infrastructure constraints such as in power and transport. Indian industry pays a high price for power due to the government's policy of subsidizing power used in agriculture. The inferior quality of roads makes it difficult to transport goods from one part of the country to another. In addition, there are some barriers to inter-state trade such as taxes imposed by states on entry of goods from other states. All this hurts the competitiveness of Indian industry. Another issue is the investment climate. The plethora of rules and regulations that govern the setting up and running of a manufacturing plant discourages investment. Removal of such constraints will help Indian companies become more competitive globally. Q: In this era of globalisation, is India on road to achieving its goal of becoming a country to reckon with in the global economic scenario? A: India is slowly but surely making its presence felt in the global economic scenario. This began with India's huge success in IT and related sectors such as business process outsourcing (BPO). India has now established itself as the favoured destination for setting up back-office operations. It has become the sourcing base for many manufactured products as well. India's design capabilities in engineering and other sectors are being recognized worldwide. In addition, India's vast domestic market continues to be a lure for foreign companies. Despite our achievements still being far short of our potential, our position in the global market is secure. India is one of the two large economies consistently recording high GDP growth. Q: What future plans is CII working on to further boost understanding between counterparts in other countries and help remove barriers to trade, services and movement of professionals? A: CII has adopted a two-fold approach. One is to work through our big network of foreign offices to build better understanding between us and our counterparts, and the second to work from our offices in India to provide a constant flow of information on India and Indian industry to build better linkages. We already have a network of 13 foreign offices and three more are in the offing. We are now working to institutionalise a forum for constant interaction on all bilateral and multilateral issues to help remove barriers to trade, service and movement of professionals.
Source: IANS