| The much-awaited meeting between Prime Minister Manmohan Singh and Indian industry that is scheduled to take place on July 29 is expected to be extremely stormy even as the government has taken the stance of appeasement and listening all that the industry has to say. The tone was, apparently, set when commerce and industry minister Anand Sharma met captains of Indian industry early this month. It is learnt that the industry expressed "serious displeasure over the failure" of the National Manufacturing Policy, which has failed to invite any sizeable investment ever since it was launched more than two year back, sources told Business Standard. However, before the series of meetings that Sharma had with the industry, he had called for a closed-door meeting on the national manufacturing policy and FDI policy overhaul on June 28 in which only a selected few were invited including members of National Manufacturing Competitiveness Council (NMCC) comprising its chairman V. Krishnamurthy, member secretary Ajay Shankar, TRAI chairman Rahul Khullar, DIPP secretary Saurabh Chandra and industrialists like Sunil Kant Munjal, Hari S. Bhartia, Adi Godrej and Venu Srinivasan along with other few officials. During this meeting, Sharma is learnt to have asked for inputs as to what they believe the government should do so that the Indian industry is back in action. According to one official present in the meeting, the government seems to have finally woken up from the slumber now that alarm bells are ringing aloud with dwindling capital flows and a massive current account deficit (CAD) and more and more Foreign Institutional Investors (FIIs) ditching India that has sent shockwaves through the stock markets. Sharma, who was on an official Europe trip most of the time during the end of June, had almost back-to-back meetings with industrialists, chambers and export promotion councils before embarking on his yet another series of foreign tours. But, it seemed, that in each of the meetings industry came down very heavily on him for not taking adequate measures to support the industry at such a difficult time. The industry is likely to urge PM to fast-track certain key pending decisions. But the impact of falling Rupee is expected to dominate the meeting. In a recent analysis of the Rupee depreciation on India Inc, Crisil stated that it is going adversely impact the industry given the large foreign currency debt on the books and only partial hedging. Besides, this will also lead to increase in prices of inputs across many sectors at a time when the global demand scenario is bleak. After touching a record 6.7% of GDP in the third quarter of 2012-13, CAD fell to 3.6% in the fourth quarter of the financial year. As such, CAD was a record 4.8% of GDP in 2012-13 against 4.2% a year ago. Even the so-called green-shoots are also not visible as signs of a recovery look distant. After economic growth slipped to 5% in 2012-13, industrial growth stood at just two% in April 2013 despite low base of (-) 1.3% a year ago. According to a report by CRISIL, foreign multi brand retailers are unlikely to make significant investments in India over the next two to three years. As far as FDI inflows are concerned, during the period January-April, FDI inflows touched $7.8 billion, up just one percent from a year ago, a statement from the Ministry of Commerce and Industry said. The industry does not seem to be much enthused now that government is planning an overhaul of the FDI policy. They feel that the government is "rushing through" the process which might hamper Indian industry in the long run. The story on the exports front also looks very grim. During April-May of this fiscal, exports grew by a mere 0.21% to $48.67 billion from $48.56 billion in the previous fiscal.  via Business - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNHj1cxCAK2P2QZNpE4PEMt4qK2dRg&url=http://www.business-standard.com/article/economy-policy/pm-india-inc-meeting-likely-to-be-stormy-113071000823_1.html | |||
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