JUMPSTARTING THE ECONOMY
What Team Modi needs to do to fix the ailing economy
Eas Narendra Modi was taking oath as India’sÜ ven prime minister for a second term, along with 57 central ministers on May 31, came the grim news the next day on the Indian economy. India’s GDP grew just 5.8 per cent in the January to March quarter of 2018-19, lower than market expectations and behind China for the first time in two years, a ringing reminder to the new government of the immense task at hand. Growth for 2018-19 was 6.8 per cent, lower than 7.2 per cent in the previous financial year. India had just handed the world’s fastest growing major economy tag to China.
THE PRESSING ISSUES
But many had seen this coming. Nearly all economic indicators were pointing towards an economic slowdown. Growth decelerated at a worrying pace—from 8 per cent in the April-June quarter of fiscal 2019 to 7 per cent and 6.6 per cent, respectively, in the next two quarters. Former chief economic advisor Arvind Subramanian said in a research paper that India’s GDP growth rate has been overstated by about 2.5 per cent from 2011-12 onwards, casting a shadow on the country’s over 7 per cent growth claims. While Subramanian is yet to make the details of his research public for further scrutiny, the government has defended the GDP calculation, saying the GDP estimates have been done on accepted procedures.
There is an evident slowdown in economic activity across sectors. Agriculture, forestry and fisheries grew at 2.9 per cent in 2018-19 against 5 per cent a
year ago. Mining and quarrying grew at 1.3 per cent against 5.1 per cent in 2017-18, while electricity, gas, water supply and other utility services grew at 7 per cent (8.6 per cent). The index of industrial production (IIP), a measure of industrial activity, grew at 3.7 per cent in the quarter ending December 2018, the lowest in five quarters. Corporate India’s sales and gross fixed assets grew the second slowest in five years, even as consumption tanked.
There was more grim news. The Periodic Labour Force Survey 2017-18 of the National Sample Survey Office (NSSO), released the same day as the GDP numbers, showed that India’s unemployment rate had risen to 6.1 per cent in 2017-18, confirming the data ‘leaked’ earlier which showed unemployment to be the highest in 45 years. The government, however, maintains that the two sets of data cannot be compared as the methodologies are different.
The banking sector, which has applied brakes on loans to ‘risky’ sectors, continues to face a credibility crisis in the wake of the Nirav Modi and Mehul Choksi scams. The shadow banking sector, represented by non-banking financial companies (NBFCs), is reeling under the collapse of IL&FS after it defaulted on a series of bank payments, leading to a credit squeeze in the system. The situation has only worsened following the liquidity crisis and allegations of financial irregularities at Dewan Housing Finance Corp. Ltd, yet another NBFC. The government may struggle to meet the fiscal deficit target of 3.4 per cent in 2019-20 on account of higher spending and low revenue growth, Moody’s Investors Service declared in February this year. The delicate fiscal balance will be under duress if crude prices, which had remained low for most part of Modi’s first term, inch up due to the escalation of US-Iran tensions. Meanwhile, rural distress and the poor state of agriculture, a sector hit by two back-to-back droughts between 2014 and 2016, continue to be areas of concern. Even as Election 2019 was fought against this bleak backdrop, people voted in Modi, possibly in the hope that a resolute new government may take radical steps to jumpstart the economy. But that is easier said than done.
ACTION STATIONS
Modi’s new cabinet, which signals both continuity and change, is in office. In the key ministries for the economy—finance, commerce and industry, and infrastructure—Modi has placed colleagues he considers high performers—Nirmala Sitharaman, Piyush Goyal and Nitin Gadkari, respectively. The government has also set up committees led by the prime minister to address the issues of employment and investment. The prime minister will chair the Cabinet Committee on Investment and Union home minister Amit Shah, defence minister Rajnath Singh, Sitharaman, Goyal and Gadkari will be its members. He will also head the Cabinet Committee on Employment comprising 10 other members, including Shah, Sitharaman, Goyal, Singh, minister for agriculture, for
“WE HAVE NEVER TOUCHED AGRICULTURAL REFORMS. THE 1991 REFORMS DIDN’T DO ANYTHING AND THE UPA DEREFORMED AGRICULTURE. THE APMC ACT MANDATES A FARMER CAN ONLY SELL AT A LICENSED MANDI. WHO MAKES MONEY IN A MANDI ?” SURJIT BHALLA, ECONOMIST
rural development and for panchayati raj Narendra Singh Tomar, petroleum minister Dharmendra Pradhan, HRD minister Ramesh Pokhriyal ‘Nishank’, skill and entrepreneurship minister Mahendra Nath Pandey, urban development minister Hardeep Singh Puri and minister of state for labour Santosh Kumar Gangwar.
Sitharaman’s is the toughest job—to prepare and present a budget in four weeks, an exercise that usually takes three months or more. Many who have worked with her describe her as meticulous and diligent. She is known to read all files and make inquisitive interventions. She also doesn’t keep any work pending. During her tenure as commerce minister, she came across as inward-looking, but was able to articulate her point of view and let her disagreement be known rather emphatically. She will have to work closely with Goyal, as India needs its manufacturing and export sectors to grow and, at this point, both are facing huge challenges. Sitharaman’s first job as finance minister would be to present credible numbers because the calculations presented in Goyal’s interim budget don’t hold any more. “Those revised estimates are 10 per cent off. She will have to re-draft all the budget numbers, which is a huge job to do in a month,” says an economist, requesting anonymity.
Industry representatives have already met with Goyal and Gad
kari, who holds the micro, small and medium enterprises (MSME) portfolio, apart from road transport, shipping and highways. Both ministers have built reputations for getting things done and of possessing a deep understanding of economic and structural issues. So there is hope that Gadkari and Goyal at the helm of two crucial ministries will find ways to reboot investments and generate employment. Gadkari, in his first stint as roads minister, worked with several states and ministries to resolve ministerial issues and speed up government decisions. For instance, if the railways would earlier take two to three years for a land-acquisition clearance, Gadkari would work with the railways ministry and get them to give clearances online. When he took charge, there were about 300 projects that were stalled because of inter-ministerial issues. He set up an infrastructure committee and met the chief ministers concerned to thrash out the issues. “His (Gadkari’s) approach has been ‘convince me otherwise or follow me and take a decision’,” says a close aide. Infrastructure is expected to become a big job creator and may even compensate for the lag in manufacturing. Gadkari has big plans for Modi 2.0, including operationalising the Mumbai-Delhi expressway, which, some expect, will spur economic activity in and around the corridor. “There is a power grid in the country, my dream is to make a road grid—with a four-lane road and express highway network. It takes 3-4 days to travel from Delhi to Mumbai. I want to bring it down to 28-30 hours. I will do it in two and a half to three years,” says Gadkari.
Much of the road-building in the first term of the Modi government was financed by the government. To continue on this trajectory, the ministry will have to work out innovative investment models to attract investors. Exorbitant land acquisition costs have been a deterrent. The reluctance of banks to lend, coupled with the NBFC crisis, has meant that capital for such ambitious projects has dried up and the government has little fiscal room to continue spending. Gadkari will also have the onerous task of reviving India’s MSME sector that took a knock from demonetisation and GST, and has seen the most shutdowns and job losses.
Goyal’s reputation as interim finance minister and railways, coal and power minister has, again, been one of a doer and of someone with his ear to the ground. During his short stint as finance minister, he established a rapport with, and won the trust of, investors and played a key role in the electrification of India—one of PM Modi’s defining promises. The Gadkari, Sitharaman and Goyal troika will play a key role in steering the economy and striking a fine balance between managing expectations and delivery. Goyal will have to think of ways to boost exports and ensure India comes up with some alternative schemes to replace the export promotion schemes the US has challenged. The country will also have to seek new markets for goods that will be affected by the US withdrawal of preferential trade tariffs.
“WE ARE MONITORING MAJOR ENTITIES IN THE UNIVERSE OF NBFCs AND HOUSING FINANCE COMPANIES. THE RBI REMAINS COMMITTED TO A ROBUST NBFC SECTOR” SHAKTIKANTA DAS, GOVERNOR, RBI
BOOST CONSUMPTION
Modi’s new team will have to navigate rough terrain, as a host of issues beg attention. The drastic fall in consumption is one. India had been relying only on one engine—consumption—for growth, and that too is failing. Automobile and FMCG sales are one reflection of the state of affairs. Passenger vehicle sales, a fairly good measure of an economy’s health, fell 21 per cent in May. While a part of the uncertainty in the sector stems from the new emission control norms which kick in April 2020, sluggish economic growth, rural distress and lower disposable incomes have also made buyers more cautious than they have been in the recent past. Meanwhile, FMCG giant Hindustan Unilever Ltd reported its lowest volume growth in six quarters, at 7 per cent in January-March 2019. Market research firm Nielsen has lowered its growth projection for India’s FMCG market from nearly 14 per cent in 2018 to 11-12 per cent in 2019.
“Consumers have dipped into their savings, and also borrowed. The liabilities of households are also rising,” says D.K. Joshi, chief economist at Crisil. Going forward, to revive the economy, action has to hinge on two major areas—consumption and investments. Joshi predicts consumption will pick up in the next few quarters, but private investment will take longer. New investments in India plunged to a 14-year low of Rs 1 lakh crore in the December quarter of fiscal 2019. New private projects fell 62 per cent in the December quarter compared to the September quarter.
Madan Sabnavis, chief economist with Care Ratings Ltd, thinks that only when consumption rises will capacities be put to use, urging producers to invest more. “That is why even though the RBI has been reducing rates, it has not led to a corresponding pick-up in investment,” he says. Banks have also been reluctant to pass on lower rates to retail consumers. “Transmission of rates is a perennial problem,” says Joshi. The transmission is asymmetric—higher rates are passed on immediately but not lower rates. Banks find it difficult to lower interest rates unless they see their own costs go down.
TACKLE THE CREDIT SQUEEZE
While the scare of mounting non-performing assets (NPAs) has made banks slam the brakes on lending, there is an imminent crisis in the shadow banking space due to the credit squeeze, overleveraging, big mismatch between assets and liabilities and the misadventures of some very large entities, as corporate affairs secretary Injeti Srinivas recently told news agency PTI. It was, he said, a “perfect recipe for disaster”. Banks could see fresh bad loans worth Rs 1.5-2 lakh crore in the next one year, according to credit rating agency India Ratings and Research.
According to some economists, the first thing the government needs to do is to outline its stand on the NBFC crisis. “We are sitting on a time bomb. You have to take very quick decisions to figure out
which path you want to take,” says an economist, unwilling to be named. There are two options before the government. First is to let the NBFCs fail, allow those not sustainable to die, but be very proactive in containing the fallout. The other option is to bail them out. But one way or another, the NBFC crisis needs to be resolved.
NBFCs are a credit lifeline for several small and big businesses. Vikram Kirloskar, vice-chairman of Toyota Kirloskar Motor and president of the Confederation of Indian Industry (CII), says the slowdown in auto sales can at least partially be attributed to the NBFC crisis.
Sabnavis of Care Ratings says NBFCs followed a model nobody found objectionable until the crisis. “They borrowed short term and lent long term,” he says. With their funds now choked, the sector is in the grip of a fear psychosis, making it risk-averse. “The assurance (for the NBFCs) has to come from the government and the RBI,” Sabnavis adds. Unfortunately, there was no indication of that in the monetary policy announced by the Reserve Bank of India (RBI) on June 6. “We are monitoring major entities in the NBFC universe and housing finance companies. The RBI remains committed to ensure we have a robust, well-functioning NBFC sector,” was all RBI governor Shaktikanta Das would say. The benchmark repo rate was cut by 25 basis points for the third time in a row and the central bank’s policy stance changed from “neutral” to “accommodative”, a move that is expected to improve money supply in the system. The leverage ratio of banks was also relaxed to allow them to lend more.
Falling demand is another issue the government needs to address urgently. Some economists even justify additional fiscal spending as long as there are enough ‘bells and whistles’ around it. Even the direct tax structure needs an urgent relook—corporates have long been seeking a lower tax rate and removal of exemptions. “Investments will come in only if there is an incentive and return on investments. Investors have to make money,” says an economist, requesting anonymity.
REVIVE EXPORTS
Just when our exports were picking up, the US, locked in a trade war with China, challenged India’s export promotion schemes and ended preferential trade treatment for $5.6 billion worth of exports that had duty-free status. The continued slowdown in global growth and increasing share of services
“WE NEED TO OPEN A VAST RANGE OF SECTORS SUCH AS COAL, ENERGY, OIL AND GAS TO LARGE-SCALE PRIVATISATION” AMITABH KANT, CEO, NITI AAYOG
in GDP meant that growth in Indian merchandise exports has been steadily slowing. However, it has fallen to an anaemic 1.7 per cent per year in the past five years, impacting the performance of export-oriented firms, and even job creation. A major problem export units have been facing is finance, especially small and medium enterprises. Another area where Sitharaman and Goyal will need to work together is in easing the pressure on liquidity arising from GST payments. For this, the GST Council has to implement the e-wallet (electronic wallet) scheme, which would be credited with notional or virtual currency by the Directorate General of Foreign Trade (DGFT). Exporters can use this virtual currency to pay off GST on the goods they import or procure so that their funds are not blocked. To tackle the trade slowdown, Goyal held a series of bilateral meetings on the sidelines of the G20 Ministerial meeting on Trade and Digital Economy in Tsukuba, Japan, days after he took charge.
DISINVESTMENT AND WELFARE
This is one area where the government needs to take a hard look as disinvestment can put money in the hands of the government to spend on welfare schemes without enlarging the fiscal deficit. Last fiscal, the government said it had exceeded the disinvestment target by Rs 5,000 crore as receipts touched Rs 85,000 crore against the targeted Rs 80,000 crore. Just before the end of FY2018-19, state-owned Power Finance Corporation acquired over 52 per cent stake in REC Ltd for Rs 14,500 crore, helping overshoot the disinvestment target. Critics, however, say disinvestment has not brought down actual government ownership as the assets and liabilities of one public sector behemoth have just gone to another. For 2020, the Modi government has fixed a disinvestment target of Rs 90,000 crore.
The government’s attempts to disinvest from Air India have received a poor response from investors. Air India has been wallowing in losses ever since its merger with Indian Airlines in 2007, and has been accumulating losses of Rs 5,000 crore every year. The central government modified the earlier clauses to attract foreign direct investment by divesting 76 per cent in the airline, but even then there were no takers. It has been a major embarrassment for this government’s disinvestment drive, since they were planning to make the carrier a showpiece in this regard.
A senior bureaucrat and economist says the government needs to move swiftly towards monetising government-owned assets and put together an aggressive disinvestment agenda to rev up private investment and the economy. “You need quick privatisation, as in the case of airports. The government has no business running hotels, stadiums or firms such as the Bharat Sanchar Nigam Ltd. You will get a lot of the private investment going,” he says. The government should exit a number of areas in which it is sitting on huge assets, open up mining to private players and privatise BharatNet of the National Fibre Optic Network. “Bid it out in a transparent manner,” he goes on to add. Media reports say India will soon activate an ‘alternative mechanism’ to speed up strategic sales. The mechanism consists of select
ministers empowered to decide on the timing, price and extent of disinvestment in a state-run company.
FAST-PACE INDUSTRIAL GROWTH
Businessmen have been concerned that the Modi government’s policies were invasive to the point of being destructive, and the promise of lower tax rates never materialised. Start-ups have complained of being hounded by tax authorities, contrary to the Modi government’s promise of minimum government. While small business owners lament how demonetisation and GST caused a double disruption, big businesses say investments will pick up only if there are visible returns on them. Growth expectations for India are low at the moment. There is a trust deficit between the industry and the government, and no visionary disinvestment agenda or land monetisation plan seems forthcoming to lend credibility to the government’s plans to lift the economy.
There is some effort, though, in the direction of ease of doing business. Ramesh Abhishek, secretary in the department for promotion of industry and internal trade, is on a mission to take India from 77th position to within the top 50 in the World Bank Ease of Doing Business rankings. An action plan is in the works for state- and district-level business reforms. Abhishek speaks of the cut-throat competition among states and how some states that were not interested initially are also coming on board. “Telangana and Andhra are always competing with each other. But now states like Haryana are also doing very well. By doing these rankings, we are also putting pressure on states to shape up. Nearly two-thirds of the reforms are of national character while one-third is for states,” he says. “The primary focus of the government’s industrial policy should be on improving competitiveness,” says Joshi. “Significant improvements are needed in logistics, infrastructure and simplification of land and labour laws.”
There is no magic wand to unleash the animal spirits of the economy. But the private sector needs to see a carrot and the government has to make the carrot visible through certain incentives. The boom in the software sector, for instance, came on the back of a 10year tax holiday. While such a tax holiday is not possible for all sectors, the government can identify high-growth and employment-generating sectors, and offer incentives. The crusade against corruption should continue but the zealousness should not kill businesses. The government may have overcompensated in its anxiety to deflect the ‘suit-boot ki sarkar’ jibe. “Finance minister Sitharaman has to ensure that industry knows government policy will not harm them. Ease of doing business is not just about clicking on the computer and getting things done,” says an economist advising on macro investments.
“The cost of equity is high, people have been using a lot of debt and an economy cannot grow with high debt,” says Kirloskar. Corporate tax reduction never happened.
The government should remove exemption and reduce the corporate tax rate to 18 per cent, he adds.
Meanwhile, manufacturing is still stuck in limbo. Its share in GDP inched up to 18.2 per cent in FY2018-19, from 17.2 at the end of UPA-II. The meagre one percentage point increase in five years shows how much faster the manufacturing sector needs to grow if its share in GDP has to reach 25 per cent by 2022, a level India needs to achieve to compete with countries like China, US, Japan and South Korea, and generate enough jobs for India’s youth.
The government needs to push ease of doing business on the ground, especially in areas of land acquisition, faster and simpler clearances, and also ensure a lead role for the states in reforms. For instance, only eight states have implemented the Land Acquisition, Rehabilitation and Resettlement (LARR) Act, 2013. This is despite the Union government allowing states to amend LARR as per their specific requirements. The government should also identify key areas of growth in global markets and set up units that can compete globally on product quality and cost-effectiveness.
Not only government but industry too can help manufacturing grow, says Maruti Suzuki chairperson R.C. Bhargava. “The government has to reduce transaction costs of all kinds and create an atmosphere where industry is pushed towards being more egalitarian,” he says. Moreover, there should be a thrust on private-public partnership aimed at skill development, since lack of a skilled workforce is one of the biggest drawbacks of the sector. A knowledge of new technology is imperative in modern manufacturing. The government also needs to take a hard look at public sector enterprises in manufacturing. While they need more functional autonomy, they also have to be made accountable to their stakeholders. Many public sector firms are struggling with losses, bloated workforces and a casual attitude to productivity.
LIFT THE FARM SECTOR
Agriculture being another area of focus, Modi has entrusted the portfolio to Madhya Pradesh MP Tomar, in addition to the ministry for rural development and panchayati raj he headed in the previous government. The agriculture growth rate—at an average of 2.7 per cent from 2014 to 2019—has been much lower in the NDA regime than in the UPA years. Low growth in rural wages (3.8 per cent year-on-year in December 2018) and low farm produce prices have led to widespread rural pain, even as job losses and farmer suicides continue
Reforms have eluded agriculture entirely, say experts. “We have never touched agriculture reforms,” says economist Surjit Bhalla. “The 1991 reforms didn’t do anything for the sector and the UPA de-reformed agriculture. Why do we need the Essential Commodities Act? The Agricultural Produce Market Committee (APMC) Act mandates a farmer can only sell at a licensed mandi. Who makes money in a mandi?” That abolishing the APMC Act remains politically contentious was evident when Maharashtra chief minister Devendra Fadnavis abolished the act only to revoke it three weeks later. The sector had posed a big challenge to the Modi government, with agri distress contributing to the BJP’s losses in assembly elections in the heartland states of Rajasthan, Madhya Pradesh and Chhattisgarh in December. Raising farm productivity could be one step towards increasing demand in the rural sector, says Ashok Gulati, Infosys Chair Professor for agriculture at the Indian Council for Research on International Economic Relations (ICRIER). To achieve this, India needs to rev up its agri-GDP growth, which is below the desired level of 4 per cent. “India has never had any major agri-reforms and farmers’ incomes have remained very low,” says Gulati.
COMPLETE REFORMS
Reforms already initiated by the government should be fine-tuned and finished. “GST and the Insolvency & Bankruptcy Code (IBC) need to be fixed. This will give more results than new reforms,” says Joshi. Both have enhanced the efficiency of the system, and the benefits will be visible over the next few years, he adds.
Although GST brought various central and state taxes under a single tax umbrella, the classification of goods under the four slabs of 5 per cent, 12 per cent, 18 per cent and 28 per cent required constant revision following feedback from the business community. The GST Council is expected to meet on June 20, ahead of the
budget on July 5, where a further pruning may occur of the items in the highest tax slab. The council had in December cut rates on 23 items, effective January 1, 2019, including seven from the top bracket, leaving mainly luxury and ‘sin’ goods—besides automobiles and cement—in that category.
The IBC, too, is a work in progress. While it has infused urgency in the matter of resolving bad debts and promises to change significantly the corporate landscape, progress has been slow and litigation-riddled. RBI’s controversial February 12 circular on resolving debt in companies was seen as draconian and the Supreme Court held it ultra vires (beyond RBI’s legal power or authority). On June 7, the central bank released fresh guidelines mandating banks to start the debt resolution process of defaulting companies within 30 days instead of a single day earlier. “The new prudential framework is a breather for stressed accounts where resolution plans were under implementation but had to be referred to the IBC because of not being completed in 180 days,” says Krishnan Sitaraman, senior director, Crisil. “One of the key beneficiaries will be stressed power sector assets that were operational and on the verge of being referred to insolvency proceedings under the IBC. These are estimated at around Rs 1 lakh crore and banks were staring at significant ‘haircuts’ on many of these assets.”
REFORM LABOUR AND LAND
These are two key reforms that experts say should be tackled like GST and IBC were in the first term of the Modi government. Labour reforms should enable flexibility but trade unions have resisted change. Currently, there are 40 state and central laws regulating different aspects of labour such as wages, bonus, working conditions and industrial disputes. There have been several recommendations to consolidate these laws; a Code on Wages was introduced in the Lok Sabha in August 2017. The code consolidates four laws or labour codes on wages—industrial relations, social security and welfare, occupational safety, and health and working conditions.
The bill has been referred to the Standing Committee on Labour. In 2019, the government is expected to speed up these reforms. An Exim Bank study in 2013 found that Indian labour laws could be a reason why enterprises remain small. Even as the country faces a massive employment challenge, the average number of workers in Indian firms remains as low as 75, compared with China’s 191 and Indonesia’s 178, and this when India’s manufacturing base is largely labour-intensive. Inflexibility in the Indian labour market has also been highlighted in the Global Competitiveness Report of the World Economic Forum.
Labour laws being rigid, companies are substituting labour with capital. “Make labour more flexible so that companies don’t have the adverse incentive to go for automation more than they actually need,” says Joshi. On a more positive note, he adds that health being a labour-intensive sector, the rollout of universal health insurance scheme, Ayushman Bharat, will require huge manpower.
Likewise, land acquisition continues to be a dauntingly expensive and tedious process. The law passed by the UPA government cleared compensation at market value for urban areas and double the market value for rural areas, making it unviable for businesses. An amended Land Acquisition Bill could not be passed in the upper house of Parliament after the opposition rallied against it. It is now left to individual states to enact their own land reforms, something that has confounded investors.
For labour and land reforms, experts recommend that the central government create an overarching framework and work with states to build a consensus. India needs both short-term fixes and long-term structural reforms. “The groundwork,” says Vinay Sahasrabuddhe, the national vice-president of the BJP, “is done and it is clear that people can accept harsh decisions provided intentions are clear. This emboldens the government to take strong decisions.” Amitabh Kant, the chief executive officer of NITI Aayog, elaborates on the need for bold decisions: “We need to open a vast range of sectors such as coal, energy, oil and gas to large-scale privatisation.”
“We need to recognise,” says Sabnavis, “that there is a slowdown in economic growth because both consumption and investment have not risen to the level they should have.” The government has to revive consumption. It has initiated Rs 87,000 crore of cash transfer. It should also give some income tax concessions to the middle class to incentivise spending. The government should also lower the corporate tax rate for all companies, and link it to investment, says Sabnavis. As for expenditure, he believes there is very little the government can do, in order not to breach the fiscal deficit targets. GST rationalisation has led to a slowdown in tax collections. But this is a trade-off, since tax rate reductions can also create higher GDP, as consumption grows, something President Donald Trump in the US has done, he says.
The consensus seems to be that to return India to a highgrowth orbit bold and aggressive measures are needed. The PM now has the mandate for a strong and stable government. Decisive and effective action should follow.
“THE COST OF EQUITY IS HIGH, PEOPLE HAVE BEEN USING A LOT OF DEBT. AN ECONOMY CANNOT GROW WITH HIGH DEBT” VIKRAM KIRLOSKAR, PRESIDENT, CII