It is a privilege to address the intellectual and business elite of India and UAE at our Economic Forum. India and UAE are united by a bridge as ancient as sea trade, as steadfast as our values, as powerful as our heritage and as vibrant as our friendship. Together, we can add a new dimension to our region’s economy and help turn the 21st century into an Asian era.
The transformative visit of Prime Minister Narendra Modi to UAE in August last year cemented the foundations of this new future. This special and strategic relationship will take another quantum leap forward when His Highness the Crown Prince of Abu Dhabi Sheikh Mohammed Bin Zayed Al Nahyan comes to Delhi in January next year as Chief Guest of our Republic Day celebrations.
Our leaders set a target of $75 billion for investment; it is our responsibility to turn that soaring vision into reality within a visible timeframe.
The spirit of contemporary India under the leadership of PM Narendra Modi can be summed up in a simple phrase: Fast Forward. This is what our people, particularly the young, desire; Indians who know what India is capable of, and were often frustrated, in the past, by at the chasm between talent capacity and real time delivery. If you want to understand India under Narendra Modi let me offer just one example: two years ago, Air India had turned from a flying, smiling Maharaja into a white elephant. Just this month Air India has delivered an operating profit for the first time in a decade.
The world is recognizing the Modi momentum. India has shown a growth of 44% in FDI Equity Inflow and 36% in overall FDI Inflow since the launch of Make in India Initiative. In 2015-16, for the first time India has witnessed FDI inflows of more than USD 50 billion. India has also overtaken China as world's top foreign direct investment (FDI) destination with US$ 63 billion of FDI announced in 2015 including high-value project announcements across the coal, oil and natural gas, and renewable energy sectors.
International finance, like blood, never sleeps. Finance is the blood that pumps life into the arteries of an expanding economy. Money searches for a logical destination, a home where it can be productive, a haven where it can plant new life and harvest a rational return. India has become the world’s preferred destination for responsible, legitimate investment, offering wealth of opportunity.
At a time when the global economy is either sluggish or erratic, India has become the world’s fastest growing major economy. This has happened because the government appreciates that you have to reform in order to transform.
My senior Cabinet colleague Shri Nitin Gadkari laid out a road map yesterday when he inaugurated this forum. Those who know Gadkari ji will appreciate that when I said "road map” I meant it literally. He is, even as we speak, changing the infrastructure and connectivity atlas of India with radical imagination and a pace that could leave most governments breathless. v The year 2015-16 has seen strengthening of the resolve of our Government to create and maintain a robust countrywide network of road infrastructure. Road projects of 10,000 Km were awarded in FY 2015-16 as against 7,980 kms for the whole of 2014-15. Further, 6029 kms of roads have been constructed in FY 2015 -16 as against 4,340 kms for the whole of 2014-15. The Ports & Shipping sector has also seen tremendous growth in the last 2 years. The capacity of Indian ports has increased by 50 million tonnes in the last 6 months owing to successful completion of ongoing projects. Cargo movement on National Waterways grew by about 6% during last 6 months vis-à-vis corresponding period last year. Cargo throughput in Major Ports has increased by 5.33% as compared to an average reduction of -0.83% in the last 3 years.
Some of the projects that are on the anvil include the ‘Bharatmala’ project, which aims to build National Highways to connect coastal/ border areas and connect all district headquarters to National Highways. Another project is the ‘Setu Bharatam’ in which Railway Over Bridges or Under Passes shall be made at all 208 level crossings in the country by 2019. The Government has also approved a plan for constructing 1000 km of Expressways along High Density Corridors like the Vadodara-Mumbai Corridor and Delhi-Meerut Corridor.
This is only a glimpse of the India that is being transformed into an economic powerhouse.
The World Bank has projected India’s GDP growth at 7.6% for this financial year. Sectors such as smart cities, metro, railways, energy, aviation, roads, bridges, shipping, defence, housing, water, telecom, healthcare, pharmaceuticals and automobiles are witnessing tremendous growth and investment in India and are further going to see numerous mega projects in the coming years, under the flagship ‘Make in India’ programme of the Government.
We know that the traffic of investment has often been held up by red tape. In the past two plus years the government of PM Modi has signalled a new approach to investment and ease of doing business. But good intentions are not good enough. Only action can alter a vicious circle into a virtuous one. Here is a sample:
- Goods & Services Act provides a single tax framework across the country for all goods and services by April 2017.
- FDI policy has been relaxed in 15 sectors, raising foreign investment limit in some sectors, easing the conditions for others, and putting many on the automatic route for approval. The sectors include defence, real estate, private banking, civil aviation, single brand retail and news broadcasting. New rules provide for easier exit from investment in the construction sector while foreign investment limit in defence and airlines was allowed up to 49 per cent through the automatic route. Banks were allowed fungible FDI investment up to 74 per cent, which means that FII investment in private banks can rise to this limit.
- This should be of special interest to you: FDI policy norms for Non-Resident Indians (NRIs) have been also relaxed. Under this, the non-repatriable investments made by the Persons of Indian Origin (PIOs), Overseas Citizens of India (OCI) and NRIs will be treated as domestic investments and will not be subject to FDI caps. This is an important, even radical change, evidence of the high value your nation places on your entrepreneurial creativity, your ability to raise high finance, and your emotional bonds with the motherland.
- Insolvency & Bankruptcy Code 2016 –
(i) Debt Recovery Tribunal and National Company Law Tribunal shall act the single as Adjudicating Authority
(ii) Credit positive for Indian banks as it will increase their bargaining power in distressed asset resolutions
(iii) The government is aiming to make the new bankruptcy law operational by the end of 2016-17
- Clearance: By 2017, the average time for pending IPR applications will come down from 5-7 years to 18 months; and trademark registration to 1 month (down from 13 months).
The time taken to obtain environmental clearance for projects has already been brought down from 600 days to 190 days. The aim is to further reduce this to 100 days.
I shall not take too much of your time; but I do want to dwell on one area where we believe opportunity levels are substantial: infrastructure. This is a core commitment at the centre of Project Transformation: road transport, highways and railways. The investment proposals in road transport and highways include monetization of completed highways. Brownfield projects have their obvious attractions.
- Let me name the state-of-art communication arteries that will be the new nerve networks:
– Delhi Mumbai Industrial Corridor (DMIC)
– Chennai Bengaluru Industrial Corridor (CBIC)
– Vizag Chennai Industrial Corridor (VCIC) as first phase of East Coast Economic Corridor (ECEC)
– Bengaluru Mumbai Economic Corridor (BMEC)
– Amritsar – Kolkata Industrial Corridor (AKIC)
- Investment proposals in railways include elevated suburban corridors; dedicated freight corridors; high speed corridors and speed raising projects. Nearly 400 railway stations are being modernized and opened for redevelopment by investors. There is also a proposed new fund, the Rail Infrastructure Development Fund (RIDF).
- This not to underestimate the traditional sectors, like energy. Take the ONGC Petro Additions Limited (OPAL), US$ 4.25 billion integrated petrochemical complex at Dahej SEZ, in Gujarat; or the proposed integrated refinery cum petrochemical plant at Vishakhapatnam being done by HPCL. There is considerable excitement in new technologies, like renewable sector cooperation. You could consider participation in our solar parks or to go for joint ventures with organizations like IREDA or Power Finance Corporation and Rural Electrification Corporation.
These facts define the radical new horizon, a horizon of prosperity in which the first fruits go to those who need it most, the poor: that is our mission, and that is what we will do, where we will reach, impelled by the powerful aspirations of the Indian people. But this cannot happen without one fundamental real life reform, the most substantive and powerful reform of all: a reform that makes straight what has bent our system and twisted the moral fibre of some of our elites: corruption. Some of you paid a heavy price for past political duplicity. That age is over. If India is changed it is because Dr Modi has done surgery to extricate this cancer gene from our DNA, and established an alternative framework: transparency, at all levels. We say this with confidence, with even excitement, for we believe we are on the cusp of a new age.
Thank You.
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