We expect firms to relocate to India, Niti Ayog CEO says
NATION ATTRACTED HUGE FOREIGN INVESTMENT EVEN DURING THE PANDEMIC, NITI AYOG CEO SAYS
Amitabh Kant, CEO of Niti Ayog, government of India’s policy think tank, is a former Indian Administrative Services (IAS) officer who became famous for transforming the Indian tourism industry. The Incredible India international tourism campaign is largely credited to him. Kant spoke exclusively to Gulf News on India’s plans to revive its economy.
■ When news arrived of massive negative growth of 23.9% of Indian economy, what was the mood inside the government?
Amitabh Kant: No, we were expecting this. There was no alternative to this because India had a very stringent lock down during that period. And there was no economic activity taking place. There was no industrial activity, there was no manufacturing activity, there was no service activity. It was an unprecedented scenario; the main challenge was to save lives. What use of growth when you can’t protect lives? Therefore, the Prime Minister’s and the government’s first priority was to save lives of people. Then, nobody knew the character of the pandemic.
■ Do you think India’s lockdown was too stringent and hit the economy very hard? You are speaking with the benefit of hindsight. At that point of time, nobody knew the nature of the pandemic. As we went
along, the lockdown was eased up and we said along with lives, we have to protect livelihoods and therefore the economy was gradually and slowly opened up. Today, while Covid-19 has grown in some Indian states, economic activity is going on. The Centre has asked states not to go for (full) lockdowns.
■ If compared to Western countries, India’s stimulus package is fairly low at 2 per cent of the GDP. Why is it so?
You have to look at both the fiscal response and the monetary reforms of both the government and Reserve Bank of India. In addition to that, you have to look at the entire Atmanirbhar package. You have to look at radical reforms. Changes are in the coal sector, Micro, Small & Medium Enterprises has been redefined, the essential commodities act is changed, the agriculture produce marketing control order, the contract farming was held up for over five to six decades, all of these roadblocks have been eliminated. Now Indian farmers will be able to get market price. Earlier farmers were forced to sell in the mandi, now they can sell anywhere in the world.
Please, understand that the crisis is not yet over. We are still in the midst of a major pandemic. And this pandemic may continue for a long time. Therefore, the responses of a country like India have to be very measured.
So, the RBI appointed the Kamath committee which has recommended assistance to 28 sectors. We will serve after restructuring.
■ Critics say it’s not reforms in agriculture but it’s in agrobusinesses.
I agree. Our objective is to convert agriculture into agrobusinesses by also enabling contract farming of a large type so that businesses can get into agriculture and do large scale farming. The biggest impact that the government has done is to drive digitisation across the economy through the Jandhan-AadharMobile (JAM) trinity. We are paying directly in over 500 schemes of the government to the beneficiary. No country in the world has such a sophisticated payment system.
■ Is actual loss of lockdown around 13% of GDP (Rs30 trillion, Dh1.48 trillion)? No, I don’t think that has been estimated. People are making guesses. I don’t think any analysis of the economic loss has been done because of the crisis. The pandemic is not yet over.
The positive growth of agriculture is not enough. It can’t offset losses in manufacturing and exports.
I agree with you. But India is the only country in the world which has attracted $38 billion of foreign investment in a range of sectors even during the pandemic.
We rolled out a production and incentive scheme, in mobile and telephoning. We are attracting over $100 billion worth of manufacturing in the mobile and telecom sector and in medical sector. So, many manufacturers are looking at their companies moving out of China to relocate in India.
It was an unprecedented scenario; the main challenge was to save lives. What use of growth when you can’t protect lives?”
Amitabh Kant | CEO of Niti Ayog
■ The figures of July import from China is $5.6 billion. In spite of talk about Atmanirbhar, the import is more than June 2020.
Don’t expect this disruption to take place immediately. It is not possible. This is a strategy for a long term. We were importing a lot. Also, you cannot stop all imports. You can curtail imports if you start becoming competitive in manufacturing yourself, Atmanirbhar Bharat is making yourself competitive. And making to scale and size, and that is what we are doing across. We should be competitive as far as China is concerned.