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Industry bodies must promote ethical practices among its members: Vice President

New Delhi:The Vice President of India, M. Venakaiaha Nadiu has called on Chambers of Commerce of Industries to promote ethical practices in corporate governance, tax compliance and corporate social responsibility among its members. He also asked them to create an environment for whistle blowers to report any wrong doing without any fear.

Addressing the 98TH Annual Session of ASSOCHAM, here today, he emphasized the need to adopt zero tolerance towards corruption, bribery and frauds. He also sought such organizations to create an environment for whistleblowers to report any wrong doing without any fear.

Calling them key drivers of India’s growth, the Vice President tasked the business associations to plan for the long term vision to serve the larger interests of the nation. He stressed the need reinvent and reposition to promote trade and commerce effectively in line with the changing global scenario. A country like India cannot implement its welfare agenda without the progress and participation of industry, he said.

The Vice President said that vital structural reforms like the implementation of demonetization and GST by the Indian government have led to an expansion of the formal economy and brought about increased tax compliance and increased the tax payer base.

The Vice President stressed the need to impart education, skills and foster entrepreneurship among young Indians and said that country must harness the potential of youth and utilize the demographic dividend to better country’s prospects. We must empower the youth to become Job Creators rather than Job Seekers, he added.

The Union Minister for Commerce & Industry and Civil Aviation, Shri Suresh Prabhakar Prabhu and other dignitaries were present on the occasion.

Following is the text of Vice President’s address:

“I am very happy to be present at the 98th Annual Session of the Associated Chambers of Commerce and Industry of India, popularly known as “ASSOCHAM”.  I understand that ASSOCHAM, established in 1920, will be celebrating its Centenary in the near future.  Hundred years is indeed a long time in the history of any organization and I wish ASSOCHAM many more years of service to the industry and business community as also to the nation.

To begin with, I would like to emphasize the important role bodies like Chambers of Commerce & Industry play in the economic development of the country. They act as a bridge between the governments and the industry in creating conducive atmosphere for the businesses to thrive and produce wealth. They also play an important role in advising the governments to enact legislations and regulations that promote ease of doing business. At the same time, these bodies also have a responsibility in promoting ethical corporate governance, tax compliance and corporate social responsibility among its members.

Looking ahead, I believe that the success of a Chamber of Commerce like the ASSOCHAM will depend not just on focusing  on traditional business issues but on how  it guides its  members to face the challenges arising from globalization. In short, tomorrow’s Chamber of Commerce will have to reinvent and reposition itself to not only promote trade and commerce effectively, but also serve the larger interests of the nation.

I am delighted to be here amongst the large gathering of eminent business leaders this morning. Your presence here is affirmation of your deep commitment and interest in India’s growth story.

I am happy to share with you the ambitious, transformative vision of “New India working for 1.25 billion aspirations”

India is in the midst of an unprecedented economic and social transformation. The economy is growing at a steady pace and the systemic governance reforms are creating a more inclusive society. Most of the multilateral institutions have forecast that India will grow at more than 7 percent in 2018 and 2019, ahead of other major economies. The first quarter estimates of GDP growth for Q1 (April-June) 2018-19 show that Indian economy is now cruising at 8.2 %.

 We have managed to retain buoyancy in foreign investment, public investment in infrastructure and greatly expanded the scope of welfare measures despite uncertain global environment. Investment in infrastructure development has increased substantially and it is already visible in the improved railways, roads, airports and shipping infrastructure in our country.

India is rapidly expanding its infrastructure. For instance, over 9,829 Km national highways were constructed during the year 2017-18 as compared to 8,231 km during 2016-17.

We have seen a strong global confidence in the India story with a surge in Foreign Direct Investments which reached over US $ 52 billion in 2017-18(RBI, Annual Report for 2017-18).

India has emerged as one of the leaders in renewable energies and the government has launched a massive push for clean energy. India’s Nationally Determined Contributions (NDCs) under Paris Climate Agreement, inter-alia, include achieving about 40 percent cumulative electric power installed capacity from non-fossil fuel based energy resources by 2030. India has taken various initiatives, including setting up of National Solar Mission and has set a target of installing 175 GW of renewable energy capacity by 2022 for increasing share of carbon free energy in the energy mix.  Solar energy prices have fallen to record low of Rs2.44/unit, thus bringing us close to achieving our goals under the Paris Climate Accord.

India is playing a leadership role in International Solar Alliance which is committed to financing solar energy projects around the world.

Only recently, the United Nations has bestowed the Champion of the Earth Award, its highest environmental honour, jointly on Prime Minister, Shri Narendra Modi and the French President, Emmanuel Macron in the ‘Policy Leadership’ category for their pioneering work in championing the International Solar Alliance and promoting new areas of levels of cooperation on environmental action, including Shri Modi’s unprecedented pledge to eliminate all single-use plastic in India by 2022.

Dear sisters and brothers, we are committed to build a five trillion dollar economy by 2025, making us the 3rd largest consumer market in the world. We are strengthening the manufacturing sector through the Make in India and other programs, even as our services sector remains robust and high-tech.

Last four years have witnessed major reforms which include harmonization of indirect taxes through GST, easing the regulatory environment, facilitating foreign direct investment across all sectors, massive recapitalization of the public sector banks at Rs.2.11 lakh crore and the implementation of Insolvency and Bankruptcy Code, 2016. Vital structural reforms like the implementation of demonetization and GST by the Indian government have led to an expansion of the formal economy and brought about increased tax compliance. The number of people, who had filed Income Tax returns have surged. All these measures have given a fillip to the Indian economy, which is expected to pick-up further momentum in the coming years.

The IMF had recently forecast a growth of 7.3 per cent in the current year and 7.4 per cent in 2019.

The IMF in its World Economic Outlook said that in India important reforms have been implemented in the recent years, including the Goods and Services Tax, the inflation-targeting framework, the Insolvency and Bankruptcy Code, and steps to liberalize foreign investment and make it easier to do business. “Looking ahead, renewed impetus to reform labor and land markets, along with further improvements to the business climate, are also crucial,” it said.

I would like bodies like the Assocham to be in the forefront in promoting corporate ethics by its members and in following various reforms initiated by the Government.  Ethical behavior has to be promoted by individuals as well as organizations by adopting zero tolerance towards corruption, bribery and frauds. Organizations should also create an environment for whistleblowers to report any wrong doing without any fear.

Total tax compliance should be the motto of every corporate and bodies like Assocham should sensitize its members on this aspect.  It should also sensitize its members towards taking up various CSR activities by organizing seminars and workshops on the issue regularly.

As part of the efforts to curb the menace of black money, the government has signed treaties with 48 countries for extradition of fugitives and brought in the Fugitive Economic Offenders Bill. India also played a major role in building a consensus among countries for free flow of financial account information to tackle black money stashed abroad.

Any tough reform will face teething problems in the initial stages and the same was the case with both demonetization and GST. However, the long-term advantages will definitely outweigh the short-term hiccups which caused a bit of economic slowdown. Well, that period is over now and the economy is on the track to achieve a higher growth.

India has to gear up the delivery system so that the intended benefits of the policies and programmes of government reach the people on time in the spirit of the principle “Sab ka Saath, Sab ka Vikaas”. Inclusive and rapid broad-based economic development will address a number of problems like income and regional inequalities. The real challenge for us is to ensure that the legislative intent is translated into effective implementation and nobody is left out of the inclusive growth story.

India is witnessing the onset of an information technology revolution which is changing the way a government engages with its citizens. This transformation rests on digital infrastructure that allows free flow of information, innovation and ideas on the information high-ways. We must fully utilize the power of information technology to reach out to the targeted beneficiaries. Government has launched some very significant  initiatives like GST – making India into a single unified market, GeM – to reform government procurement process, Public Finance Management System (PFMS) – to make Just-in-time payments between various entities; eNAM – creating a national agriculture market by connecting the existing Mandis through an electronic platform, and JAM – Jan Dhan, Aadhaar and Mobile using Aadhaar to target government schemes to the poor and the needy sections of the society, besides removing intermediaries.

More than 326 million persons have opened bank accounts in the last four years making financial inclusion a reality. Tax base has been widened and tax compliance has increased. The Direct Benefit Transfer (DBT) is a path-breaking innovation that cuts down multiple intermediaries.

As you all are aware, the Government’s efforts in the area of Ease of Doing Business include cutting down on layers of regulations, simplifying procedures, promoting on-line applications and fixing time-lines for approvals.  As result, India has climbed 30 places in the World Bank Ease of Doing Business ranking. There also has to be a change of mindset for these reforms to be effective.

Given the size and diversity of the country, there are challenges in delivering basic services to the common man. Therefore, it is imperative to streamline service delivery and provide effective, transparent and people-centred good governance.

India has become the third largest start up eco-system in the world. According to a NASSCOM report, about 1,000 start-ups were added in 2017 taking their number to nearly 5,200. Interestingly a chunk of these start-ups are from Tier-II and Tier-III cities.

The new India that has emerged is ‘Aspirational India’ with about 65 per cent of the population under 35 years of age. While most of developed countries face the risk of an ageing workforce, India is expected to have a very favourable demographic profile. It is estimated that by the year 2020, the population of India would have a median age of 28 years only as against 38 years for US, 42 years for China and 48 years for Japan. This ‘demographic dividend’ offers a great opportunity and it is extremely crucial to effectively harness it.

In order to capture this demographic dividend, we need to impart appropriate education, skills and foster entrepreneurship so that the youth could also become job creators and not remain as mere job seekers.

As we all know the talent of Indian youth is recognized across the world as is evident from the leadership positions many Indians are occupying in well-known global companies. We need to create adequate opportunities, fully harness their potential and ensure that they productively contribute towards nation-building. India’s demographic advantage also provides us with a unique opportunity to not only provide gainful employment through appropriate skilling to meet the domestic demand but also meet the requirements of the aging economies of the world.

While India’s academic system has undergone a massive expansionary phase, there is a need to strengthen and popularize vocational education system. The students graduating from our college and Universities do not have adequate employable skills. The quality of education both in terms of the curriculum as well as teaching methodology needs to be improved.

Education is not only for getting employment, but also for the overall development of an individual—for enlightenment and enhancement of knowledge.

We also need to pay attention to equity in access to education. Women and girls, weaker sections, differently-abled and minority groups tend to be generally educationally disadvantaged. In a country that is committed to the principle of ‘social justice’, equitable opportunities to education become a crucial first step towards achieving ‘Aspirational India’.

With growing middle class, rising disposable incomes, expanding consumer market and the presence of a young, talented work force, the global companies are choosing India for their manufacturing operations and R& D centres. There is also a healthy competition among various State Governments, which are implementing reforms to attract investors.

We have also set the goal of providing affordable and inclusive healthcare to the citizens and to realise this goal we have launched the world’s largest and India’s most ambitious healthcare program, Ayushman Bharat — National Health Protection Mission. The scheme will provide a health insurance cover to 100 million families.

The policy initiatives taken by the Indian government such as Make in India, Skill India, Digital India, Smart Cities and Start-up India are opening up new opportunities for youth.

The current Indian context is full of infinite opportunities. It is an aspirational India with a transformational vision. The next few decades can potentially be India’s decades.  I am hopeful that the Prime Minister’s three-word mantra to ‘Reform, perform and transform’ would inspire every Indian to scale new heights and help transform the country.

I hope ASSOCHAM will play a very constructive and useful role in coming years to realize the aspirations of 1.2 billion Indians in a very befitting and proactive manner.

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