Speech

SPEECH OF HON’BLE MINISTER OF STATE FOR AGRICULTURE, CONSUMER AFFAIRS, FOOD & PUBLIC DISTRIBUTION, GOVT. OF INDIA TO BE DELIVERED DURING COMMONWEALTH BUSINESS FORUM 2010 ON 5TH OCTOBER, 2010 AT TAJ PALACE HOTEL, NEW DELHI.


I welcome all participants of Commonwealth Business Forum 2010.


It gives me great pleasure to address you on this momentous occasion. The Commonwealth Games, the third largest multi-sport event in the world, have taken off to a glorious start, the athletes are busy with their events, and spectators are flocking to the venues in big numbers. I felicitate all of you on your participation in the Games and wish your sports teams all the best for the coming days.



Sports and business have now become inseparable. The symbiotic relationship between sports and business is witnessed in the large gathering present here today. The opportunities for business during sports events are very large. In Delhi itself, the estimates for the city infrastructure, sports venues and other necessities stand at close to $10 billion. It is estimated that the Games will have an economic outcome of close to $5 billion over the next few years and succeed in adding 2.5 million new jobs. In fact, we will be gaining from this event for the next many years.

Most important, the Games will bring a new sense of confidence and a new brand image for India as a global player. Despite some glitches, overall the facilities are world-class and have brought new standards to Indian infrastructure, Indian sports and Indian services. India has leapfrogged the transition from low levels of quality to global benchmarks and this Game is a sure indication of this.

Our close friends in the Commonwealth grouping are particularly well placed to reap the benefits of India’s emergence on the global economic stage. From our shared histories and experiences, we enjoy mutual friendship and respect. The institutional frameworks of Commonwealth countries such as democracy, rule of law, media freedom, administrative and bureaucratic procedures and education systems are similar, leading to greater understanding and ease of communication.

In fact, the commonwealth members have lent special significance to maintaining the institutions left behind by the British which are now serving us well. In particular, the emergence of English as the language of the world owes much to its usage by the Commonwealth’s countries over the years. This common means of communication is a major tool for our cooperation and partnership and is the very foundation of our grouping.

With these advantages, the organization of the Games in India draws attention to the business partnerships that can be strengthened and deepened among Commonwealth countries during its course. I am grateful to the Commonwealth Business Forum for giving me this opportunity to address you and I felicitate the Organizing Committee and the Confederation of Indian Industry for organizing this event.

Let me outline some of the excellent opportunities that the Indian economy offers to our friends in the Commonwealth.



The Indian economy is expected to grow by over 8.5% this year. A recent Economist cover story says that India will overtake China in growth over the next three-four years to become the fastest-growing major economy. The Indian economy recovered easily from the global economic crisis which dented our progress for two years. Yet the pace of growth remained at over 6.5% for each of the two years. This was due to prudent reforms, calibrated policies of liberalization and rapid action in terms of stimulus and other measures.

The Government took unprecedented action of pumping purchasing power into the hands of the poor where it has the greatest multiplier effect. This kickstarted a fresh round of spending and boosted the manufacturing sector. Even while India experienced the worst drought in 30 years and agriculture production stagnated, the manufacturing and services sector emerged to take up the slack and become the growth drivers of the economy.

This year, the Indian economy will gain considerably from the performance of the monsoon. Although the heavy rains disrupted final preparations for the CWG last month, they were good news for the planting season. We expect agriculture growth to be robust this year, and this will power GDP for the year.

While much of agriculture is regulated to protect the marginal farmer, there have been excellent examples of businesses doing well in the sector. Companies have invested in the supply chain, in contract farming, in agricultural implements and machinery, and in financial services for farmers. Many more openings are available in the downstream sectors of food processing, packaging, refrigeration, etc.

The business opportunities derived from agriculture in India are enormous and not sufficiently exploited by overseas businesses. India has 14 agri zones and is capable of producing a wide variety of grains, fruits and vegetables. The rising share of horticultural products as compared to grains in the basket of agricultural produce attests to the changing lifestyles of Indian consumers.


However, India faces a large technology deficit in terms of agriculture productivity. Our yields are far lower per unit of area than that of other countries. This has implications for companies in technology, agricultural implements and machinery, agri inputs such as fertilizers, biotechnology and other areas. The absorption capacity of the Indian farming sector for such technology and advanced equipment is high. Just as the Commonwealth Games are an example of India leapfrogging technology usage, Indian agriculture too can jump into more technology-intensive methods of farming within a short time.

In fact, the compulsions of food security for a rising population with increasing spending power imply that such technology jumps are not just required but are imperative for the future development of the country.

The good agriculture growth also translates into increased discretionary spending by farmers and ancillary sectors of the rural economy. In fact, rural demand has become the prime mover of domestic demand in India. While other countries are struggling to sustain their levels of domestic demand given the high rates of unemployment, India is gaining from robust and healthy expenditures.
The manufacturing and services sectors are likely to derive high advantage from this growth. Already we are witnessing sectors such as automotives, consumer durables and related sectors benefiting from the dynamic and thriving rural markets. Companies both domestic and multinational are reconfiguring their marketing strategies to address rural markets. Value and marketing chains that reach down to the farthest villages are proving to be the most profitable.

India’s infrastructure mission will be a major source of growth. In the five years from 2007 to 2012, the country would have significantly stepped up its infrastructure spending to $550 billion. In the next five years, it is estimated that India will be spending $1 trillion in the sector.

We have seen the power of the infrastructure sector in areas such as roads and highways and telecommunications, which have revitalized the economy. Current deficits in the infrastructure sector are being addressed through dedicated policies in the realm of regulation, financing, and administration. Public private partnership is a major plank of our infrastructure engagement and much investment is expected to come from overseas sources.

In services, India’s export growth has been spectacular. Today, the country is the largest exporter of software services and a major player in business and professional services. Service exports have crossed $100 billion and continue to gain pace, despite the economic conditions. As the world shifts increasingly to a knowledge economy, India will emerge as a key participant, given its strong educational output.

I would like to reiterate that India faces considerable challenges in its growth aspirations. Poverty remains high, and human development indicators are poor. We need to move rapidly on spreading growth to all sections of society. Health and education need to be stressed. Global economic conditions will also be a major factor in our growth, and it is important that global sources of India’s growth are not constrained by protectionist forces. However, I must reiterate that the Indian government is addressing the challenges comprehensively and I have no doubt that challenges can be converted into opportunities.

In our march towards development, we look to our Commonwealth friends for support and partnership. Your collaboration in this existing venture is invaluable to our development aspirations.

Ladies and gentlemen, a new India is on the ascendance. Just as the world’s largest helium balloon took to the Indian skies day before yesterday, we will see transformational changes in the Indian economy. A growth rate of over 10 percent could well be sustained in the next few decades, turning the country into a powerhouse for the global economy. This is the time to be in India, this is the time to invest in India, and this is the time to partner India’s development saga.

Thank you.