Nitin Gadkari says waterways only way to make India competitive on logistics cost
Principal Economic Advisor insists $5 trillion GDP in 2024 possible even without solving problems
17 September 2019, New Delhi.
Nitin Gadkari, Minister of Road Transport & Highways; Micro, Small & Medium Enterprises says that waterways are the top priority of the government in the transport sector because it is much cheaper to carry cargo by waterways than by roads and it would reduce India’s logistics costs from 16% to the level of Europe and China, which are 10% and 8% respectively.
Addressing the 46th National Management Convention of All India Management Association (AIMA), Gadkari called waterways the future of transport in India and invited business leaders to invest in the sector. “It is time to find out new options,” he said. He said that Yamuna would be enabled to carry loads from Delhi to Prayagraj, where it would merge into the Ganga waterway and things could be sent from Delhi to Bihar and Bengal by river.
Talking about roads and highways, he promised 22 new express highways and an e-highway on which trucks and buses will be powered by overhead electric cables. Talking about cost-saving innovations in land acquisition, he said that the government had saved Rs 16,000 crore by re-routing sections of Delhi-Mumbai express highway through backward and tribal areas.
Gadkari also called for greater use of biofuels because there was excess production of sugar, wheat and rice in the country and farmers were unable to get a good price for their output. “Strong political will is more important than capital and technology,” he said.
Talking about MSME sector, he said that the government’s target was to grow its share in the GDP growth from 30% to 50% and its share in country’s exports from 40% to 50%
Sanjeev Sanyal, Principal Economic Adviser in Ministry of Finance expressed confidence that India will achieve the target of $5 trillion GDP by 2024 without solving all problems. He explained that with 4% rate of inflation, achieving the target would require an 8% real rate of GDP growth.
Regarding the industry demand for a reduction in GST, Sanyal said that cutting GST in response to a slowdown was not a good idea. “Deviation leads to more noise,” he said.
Sanyal said that changing the architecture of direct taxes would address the long-term growth issues and the Finance Ministry was considering a report on the subject. On the subject of APMC reform, he said that it would not solve agriculture distress because increasing agriculture production will only depress the agri prices further and agriculture needed fundamental restructuring.
Sunil Kant Munjal, Chairman, The Hero Enterprise said that the reforms done by the government will eventually make Indian economy stronger. “If we remove all the friction in the economy, it is possible to grow by 14%,” he said.
Ajit Ranade, Group Executive President and Chief Economist, Aditya Birla Group said that the way to jump start growth was to increase public investment even if stretched the fiscal deficit a little bit. He pointed out that the government would be helped by the Rs 1.76 lakh crore non-budget receipt. Referring to the US-China trade dispute, he said that there was a danger that China could divert its excess production to Indian market.
Vikram Singh Mehta, Chairman, Brookings India & Senior Fellow, Brookings Institution, argued for a sequence of small reforms instead of a few big reforms to get the economic growth back on rails. He advised rollback of some of the taxes, injection of liquidity, stabilization of GST and moratorium on debt as some of the steps to help the confidence in the economy. He said that the lack of clarity on who was making the economic decisions was a problem since different views on the economy were coming from different people in the government.
TN Ninan, Chairman, Business Standard, supported the idea of small reforms to revive growth. He said government should give capital to the better runs-banks and deny it to those that are poorly run. He warned against taking fiscal liberties because it was not clear what was the real fiscal deficit figure – 3.5% or 5.5%. He also pointed out that the government borrowing was already crowding out the private sector and it was not possible to have lower interest rate with fiscal expansion.
The 2-day National Management Convention is highlighting the role of innovation in making India a $5 trillion economy and fostering a culture and capability of innovation in the country. The convention is being addressed by leading members of the government, renowned CEOs, startup founders, distinguished economists and leading writers on business and economy. More than 700 entrepreneurs, executives and management experts are attending the convention.
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