AIMA Foundation Day 2015

Govt will use armed forces talent and railways infra for skill development: Rajiv Pratap Rudy

Budget should reduce Minimum Alternative Tax to encourage investment: Adi Godrej

22 February, New Delhi:“India cannot have 8% GDP growth without the Make in India programme and the Make in India programme cannot work without commensurate skill development,” said Rajiv Pratap Rudy, Minister for Skill Development and Entrepreneurship. He was addressing India’s management fraternity at All India Management Association’s 59th Foundation Day ceremony in the capital today.

The minister announced that the government plans to collaborate with the armed forces in producing large number of trainers and utilize the underused Indian Railways infrastructure for delivering training programmes across the country. He said that nearly 50,000 skilled soldiers and junior officers retire every year and they could be taught to become trainers in the last year of their service. “Current India has lots of teachers but no trainers,” he remarked. He added that Indian Railways had about 6000 stations and 43,000 kms of optic fibre network that were extremely underutilized and those could be used to provide training to people all over the country. “We do not have the resources to build separate buildings and infrastructure only for skill development,” he said.

The minister asked India Inc also to contribute space and trainers for the skilling project. In addition, he said, funding the skilling programme was a major challenge as India needs to train at least 30 crore people during the next five years at an average cost of Rs 20,000 per person. He pointed out that the present budget of the Ministry for Skill Development and Entrepreneurship was only Rs 1,000 crore and finding the Rs 5 lakh crore for the skill development programme was a big challenge. “This exercise cannot be done without the industry’s contribution,” he said.

Setting the context for the discussions on the role of India Inc in creating a national economic consensus, AIMA President, H M Nerurkar said that India needed an economic consensus if the government and India Inc were to forge a functional and credible partnership to drive economic growth. “Unless they have the trust of the society, the government and the business cannot have the growth they are looking for,” he said.

Adi Godrej, Chairman, Godrej Group, spelt out the industry’s expectation from the coming Union Budget. “The government needs to balance expectations and fiscal prudence in the budget,” he said. He pointed out that the commodity prices had become favourable for lowering subsidies and fiscal deficit. He also called for a reduction in the Minimum Alternate Tax (MAT). “Many companies invest less than what they can because they get hurt by the MAT,” he said. Further, he hoped that the government would back the Make in India programme with incentives for investment in manufacturing. “The labour arbitrage between India and China is reduced now and India can take the share of manufacturing in the GDP to 25% from 15%,” he said.

Commenting on manufacturing situation, Sunil Kant Munjal, Vice President AIMA and Jt Managing Director, Hero MotoCorp, said that manufacturing alone could make it possible to create a million jobs every month to absorb the young people joining the workforce. “For each manufacturing job created, three to six are created in allied services and ancillaries,” he said. He expressed hope that GST will be implemented soon, as that will make it easier to do business and finally turn India into a single market. He counted rep tape and corruption as the key obstacles to manufacturing’s growth in India, as, he said, it cost more to send goods from Delhi to Mumbai than from Beijing to New York.

Shikha Sharma, Managing Director & CEO, Axis Bank, said that India must have a better loan recovery system in order to make it easier to do business. She pointed out that while India ranked 36th on availability of credit, its rank on debt recovery was beyond 140. Commenting on the Jan Dhan Yojana, she said that the three largest private banks had met their obligation. “However, credit is not a dole; it is not a right. The borrower must show the intent and ability to return the money,” she said.

Regarding funding manufacturing, Sharma said that the cost of funding for manufacturing in India was higher compared to the international competition. On the question of reviving developmental financial institutions to support manufacturing entrepreneurship, she said that the 6-7% interest rate subsidy that was available to the financial institutions in earlier decades from the World Bank was no longer available and it was not possible to get risk capital at the rates of commercial debt.

Dr Devi Prasad Shetty, Founder and Chairman, Narayana Group of Hospitals, raised the issue of artificial shortages in healthcare and avoidable deaths. “In India, Doctors are reduced to putting price tags on life and the society has made it legal to do so,” he remarked. He blamed the acute shortage of healthcare facilities and professionals on the restrictions on the supply of medical education. “In India, medical education has become disassociated with healthcare,” he said. However, Dr Shetty said, India could transform the healthcare industry for the whole world by using IT to bring down costs and improve delivery. “IT will reduce healthcare costs by 25% and bring down mortality by 50%,” he said. He gave the example of his group using cloud-hosted technologies to deliver healthcare to patients anywhere in the world.

Speaking on creating knowledge entrepreneurs in the country, Dr Arvind Lal, Chairman and Managing Director, Lal PathLabs, said that the knowledge professionals were India’s largest resource for entrepreneurship. He said that the knowledge entrepreneurs were best suited to make business society-friendly because of their closer connect. He added that the largest business opportunities for entrepreneurs lay in meeting the society’s underserved needs, such as healthcare, education, water etc.

To mark the Foundation Day, AIMA presented awards to some outstanding CEOs and entrepreneurs. Rajiv Pratap Rudy gave away the awards.

The following awards were presented:

  • The AIMA- JRD Tata Corporate Leadership Award - Shikha Sharma, Managing Director &CEO, Axis Bank
  • AIMA Managing India Business Leader Award – Adi Godrej, Chairman, Godrej Group
  • AIMA Public Service Excellence Award - Dr Devi Prasad Shetty
  • AIMA – JS Juneja Award for Creativity and Innovation in the MSME Sector - J Narendra Reddy, Director, Nucleonix Systems.

All India Management Association (AIMA) is the national apex body for management in India. Over the last five decades, AIMA has contributed immensely to the enhancement of management capability in the country.

AIMA has a broad base of 62 Local Management Associations including two cooperating LMAs abroad, with a membership crossing 30,000 in number. AIMA is a non-lobbying organisation, working closely with Industry, Government, Academia and students to further the cause of the management profession in India. AIMA is represented on the Boards of India's premier Business Institutions like Indian Institute of Management – IIMs. AIMA is also represented on Boards of Government bodies including the All India Council for Technical Education, National Board of Accreditation, National Productivity Council to name a few.

AIMA makes a salutary contribution to management learning and practice in the country by offering various services in the areas of testing, distance education, research, publications and management development programmes.

AIMA brings to the Indian managers, the best management practices and techniques through numerous foreign collaborations with professional bodies and institutions. AIMA is a member of the Asian Association of Management Organisations (AAMO) and works closely with several international management institutions like Robert H Smith School of Business at the University of Maryland, St Gallen Foundation etc. in organising international conferences and management development programmes. To know more, please log on to www.aima.in

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Ranjana Bhardwaj 9313342654