New Delhi: Prime Minister Narendra Modi may want to double farmers’ income by 2022, but in reality, the next generation of farmers are looking at alternative jobs as average income from agriculture is actually lower than minimum wages in most parts of the country. To change the scenario, there has to be private sector investments in primary agriculture, said Rakesh Bharti Mittal, the new president of the Confederation of Indian Industry (CII). In an interview, Mittal, who is also vice-chairman of Bharti Enterprises, said that agriculture, education, skilling and healthcare will be focus areas for the industry lobby. Edited excerpts:
IMF projects the Indian economy to grow at 7.4% this year. Does CII agree?
CII has estimated the growth at 7.3-7.7% in the year ended 31 March 2019. In my view, it should be somewhere around 7.3-7.4%. Globally, things are looking good this year. With all the major reforms, such as goods and services tax (GST), insolvency and bankruptcy code (IBC), fixed-term employment, among others, the domestic economy has already started showing signs of improvement. Sectors like automobiles, fast-moving consumer goods, steel and cement are doing well backed by infrastructure spending. The expected good monsoon will spur rural demand. CII’s key focus areas this year will be agriculture, education, skilling and healthcare. But there’s still lingering effects of implementation of GST. Any big reform will come with some hurdles. And GST is the best thing that has happened in this country in recent times. Whatever glitches it had, the GST Council has been handling those smoothly. However, rationalization of rates is important, but India cannot have a single GST. There has to be 2-3 rates, unlike five now.
What’s your view on the government’s vision of doubling farmers’ income by 2022?
Agriculture has great potential. But there has to be private sector investments in primary agriculture. Today’s youth are not interested in agriculture simply because average income from agriculture is lower than the minimum wages. Private sector’s involvement at large scale would address this issue. A lot of reforms are required at state level. There should be long-term leasing land but protect farmers’ interests, and farmers should be able to sell perishable produce directly to firms. States can follow the models of Punjab and Rajasthan but they need to go to the next level.
The NITI Aayog should come out with rankings of state governments on the ease of doing agricultural business, covering areas like power, micro-irrigation, high value crops and agri-infrastructure which would certainly make this better.
Going by critics, the government has not managed to create enough jobs. What’s your view?
I would contradict the view. We generally measure jobs created in the organized sector. The organized sector generated 5.7 million jobs in 2016-17 and there has been a loss of 1.5 million in the organized sector in 2017-18. But we do not take into account jobs created in unorganized sector. Under the ‘Mudra’ scheme, 120 million people have got loans totaling Rs3.5 trillion. Majority of them are unemployed. So, 120 million people have become self-employed, and if they have employed at least one person each, there have been 120 million fresh jobs. This is something that has not been accounted because these are informal sectors. So, what is needed is to bring jobs to formal sector from informal sectors. With the new EPFO rules, a lot of informal sector jobs are becoming formal.
Micro, small and medium enterprises, or MSME, sector will be the growth driver, and create huge jobs.
On the other hand, there’s disruptive technology every five years that could take away jobs. So, there has to be skilling and re-skilling. Academic institutions need to make curriculums based on what industry needs. Linkages between academia and industry should not be limited to placements.
In view of recent frauds in the banking sector, does CII have any suggestion for the government?
The government and the regulators need to differentiate between wilful default and default due to business cycles. For wilful default, strictest action must be taken, and the government needs to act fast. Industry should do business in ethical and transparent manner. CII is working on a voluntary code of compliance for large businesses, small businesses, and the financial sector. A voluntary code of corporate governance already exits.
However, the government and the judiciary have to judge the wrong and right if there’s an allegation.
Protectionism is on the rise. Isn’t it a bad thing for industry across sectors?
It is a global trend, including some of the developed nations. This puts bilateral trade on the back foot. I am a strong believer of free trade between countries. And, I believe there should be more Free Trade Agreements (FTA) between countries that would benefit both the countries. With more FTAs, India could eventually be a hub for exports.