CII’s agenda is to accelerate economic (GDP) growth to 6 – 6.5 percent this year and to take it to 8.5 – 9 percent as quickly as possible

The drivers for growth would be reforms and governance, inclusive growth and affirmative action, innovation, entrepreneurship and growth of MSMEs and transformation of sectors: S Gopalakrishnan, President CII

India ranks 132nd among 185 countries on the parameter of ‘ease of doing business’; this needs to be improved: S Gopalakrishnan, President CII &  Co-Founder and Executive Co-Chairman, Infosys Limited

CII Members’ Interactive Meet with Mr S Gopalakrishnan, President CII took place here today. Addressing the meet, Mr Gopalakrishnan, informed the audience that CII theme for 2013-14 is “Accelerating Economic Growth through Innovation, Transformation, Inclusion and Governance”. He said, “Our agenda is to accelerate economic (GDP) growth to 6 – 6.5 percent this year and to take it to 8.5 – 9 percent as quickly as possible. “ He further added, “The drivers for growth would be reforms and governance, inclusive growth and affirmative action, innovation, entrepreneurship and growth of MSMEs and transformation of sectors.” On the front of reforms and governance, he highlighted that the World Bank Report indicates that India ranks 132nd among 185 countries on the parameter of ‘ease of doing business’. This needs to be improved. Further, FDI should be encouraged wherever applicable in a phased manner. With reference to GST implementation, he also informed that it has been a top priority of CII to play an active role in creating the right atmosphere. He also highlighted that CII has been active on facilitating distribution reforms in power sector, model APMC Act, leveraging technology for strengthening MSMEs, the Companies Bill, Land Acquisition Bill, etc.

Mr S Gopalakrishnan also briefed the members on CII’s efforts towards the inclusive growth agenda. He informed that CII has already engaged with Dalit Chamber of Commerce and also been active on skill building and employment of marginalized sectors. On the front of innovation and entrepreneurship, CII efforts are on to popularize the job portal http://www.thefairjob.com linking industry with job seekers from marginalized sections. In transformation of sectors, President CII informed that this year CII would be starting a three year project called Project Village Budha which would be targeted to implement the idea of Kaizens (small improvements) in a village environment. Further, ‘Visionary Leaders for Manufacturing Programme’ of CII would help 100 top MSMEs to improve on their current size and status. Mr Gopalakrishnan, concluded his remarks by saying, “We will also continue our focus on global engagement and sustainability.”

Proposal to allow ‘Put’ & ‘Call’ Options in Shareholders’ agreements would boost foreign investment into the country

CII welcomes the decision taken by the Government to allow incorporation of ‘call’ and ‘put’ options in shareholders’ agreement. The proposal to remove restrictions on using options in shareholders’ pact for M&A and PE transactions would encourage inflow of foreign investment into the country. This was one of the key impediments to FDI flow into the infrastructure sector.

The clearance from the Law Ministry would pave the way for an amendment to be moved to the Securities Contracts (Regulation) Act, against the proposal initially moved by SEBI. Industry has been seeking an amendment to SCRA to allow put and call options not only to offer an opportunity to investors, especially foreign investors, to hedge their risks but also put to rest any doubts regarding the use of options. Overseas investors and lenders may be willing to consider short to medium term lock in periods of 3 to 5 years if put option from the resident promoters are allowed.

SME Exchange: Direct listing of startups without the need for IPOs as a separate SME segment

The launch of the SME Exchange last year was a milestone for accessing Equity capital by the MSMEs.

However, procedural and cost implications for listing in the current framework may not be suitable for a large number of SMEs although, they might otherwise benefit from better access to potential investors which can be gained through listing.

In this regard, a dual approach may be taken to enable easier fund raising by startups and SMEs.

i. Enable direct listing of startups without the need for IPOs as a separate SME segment. (This has also been one of the key announcements by the Hon’ble Finance Minister in the Union Budget 2013-14.)

ii. The present SME segment may be suitably modified to enable more eficient fund raising.

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