Ladies & Gentlemen,
I am delighted to be here again amidst
such a large and distinguished gathering of political and business
leaders. Earlier today, I had the pleasure of meeting President Obama
and we shared our thoughts on a wide range of issues concerning our two
nations. India’s bilateral relationship with the United States is
stronger than ever and we both agreed that the future would be even
brighter.
I am speaking to you at a time when the
global economy continues to be weak. Several parts of the world are
still facing very difficult conditions. This is a time when the world
needs new engines of growth. From the point of view of the world’s
oldest democracy, obviously it would be nice if the new engines are
democratic engines. I am happy to tell you that today India is poised to
contribute as a new engine of global growth.
A larger Indian economy has multiple
benefits for the world. Obviously, India presents a large and growing
market. But India is much more than a market. India is
- a reliable partner;
- a source of high quality scientific, engineering and managerial talent;
- a crucible of development ideas and experiments;
- an efficient source of high quality R&D;
- and a testimony that democracy and rapid growth can co-exist.
As India embarks on a new era of
development, it needs to learn much from America’s tradition of
entrepreneurship and innovation. America remains at the forefront of
scientific and technological innovation from
- air traffic control to air quality improvement,
- from drugs to drones,
from hybrid cars to hydro fracking.
Indeed, to me, America is not just a
country with a great past; it is a country with an exciting future. I am
therefore sure, that ours will be a partnership which sees both nations
benefit.
A very unique feature of the
Indo-American relationship is the critical role of the Indian-American
community in the US economy. It is rare that emigrants from one nation,
who become immigrants in another, enjoy such high respect and repute in
both countries. Indian-Americans are a powerful cementing force in our
growing economic and cultural ties.
I have just completed two years in
office. When I addressed you in 2014, I had just taken over the reins of
government. We faced a particularly challenging domestic and external
environment. Confidence of investors was at a low. Doubts were being
expressed about the future of the Indian economy. The business community
was unhappy with the inertia and stagnation that had set in. There was
frustration with archaic policies and red tape. In 2 years, we have
managed to overcome the odds and register an impressive economic
performance.
I want to take this opportunity to
describe to you the key elements of our policies. I have said several
times that my aim is to reform to transform. For me, reforms are those
policies that transform the lives of ordinary citizens. In the last two
years, we have taken a comprehensive package of reforms which go beyond
more economic reforms. I can classify them into four types.
- First, macro-economic policies to create a strong foundation;
- Second, policies to stimulate growth and employment through investment and trade, and to increase efficiency and productivity;
- Third, policies to ensure that growth benefits the poor and the weaker sections of society, including women and farmers;
- Fourth, a frontal attack on corruption.
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Let me start with the macro-economy.
Since we took office, inflation, the
fiscal deficit and the balance of payments current account deficit have
all fallen. GDP growth, Foreign exchange reserves, stock market
valuations, and investor confidence have all increased. This success is
the result of a series of well thought out policies. We have legislated a
monetary framework with inflation targeting and an independent monetary
policy committee to curb inflation. We embarked on a course of fiscal
consolidation and our fiscal deficit has been reduced substantially in
each of three budgets so far. Even while cutting the fiscal deficit, we
have greatly increased productive public investment.
This has been made possible in two ways.
Firstly, we imposed carbon taxes on fossil fuels. We took the bold step
of de-controlling diesel prices and thereby eliminated energy
subsidies. We then replaced them with taxes. A Clean Environment cess
has been increased by eight times from Rs.50 per ton to Rs.400 per ton.
Globally, there is much talk of carbon taxes but much of it is just that
– TALK. We have actually acted. Secondly we have reduced wasteful
expenditure through innovative methods and use of technology. Subsidies
are increasingly credited directly to bank accounts of the deserving
with fool proof biometric identification.
Let me now turn to our policies to
stimulate growth and employment. This audience is probably aware of the
sweeping liberalization that we have undertaken in foreign direct
investment. We have put most sectors on automatic approval and opened up
sectors like defence and railways to foreign investment. The long
pending insurance law reform was successfully passed. Several insurance
companies, including American companies, have already enhanced their
investment in the insurance sector. We have taken major steps to
increase the ‘Ease of Doing Business’ and have already begun climbing
steeply in the global rankings. We are encouraging foreign and domestic
investors to set up high quality and efficient manufacturing facilities.
We have greatly enhanced investment in roads, railways, ports and
waterways to improve logistics. We have made major process improvements
in our ports to reduce the time taken for cargo to enter and exit. We
admire the start up eco-system in your country. We are making a
beginning in replicating it. Our Start-Up India programme has stimulated
a new breed of innovators. In 2016, Bengaluru has become the fifth most
preferred location for innovation centres. It was not even in the top
10 in 2015.
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For our economy to succeed, we need a
strong banking system. We inherited a system where cronyism and
corruption were believed to be rampant in banking decisions and in
appointments to public sector banks. I held the first ever retreat of a
Prime Minister with bankers. We have set up clear performance measures
and accountability mechanisms. We are committed to ensuring adequate
capital. Interference in banking decisions has ended. A new process for
appointments has been put in place under a Bank Boards Bureau. Credible
and capable bankers have been appointed to head banks. For the first
time since banks were nationalized 47 years ago private sector
professionals have been appointed in key positions.
I now turn to our policies to ensure
that growth is inclusive. We have brought two hundred million people
into the banking system through the Jan Dhan Yojana. This is more than
the population of most countries in the world. Now, these millions are
part of our banking system, and words like ‘interest rate’ have a
meaning for them. These people have shown that there is great strength
at the bottom of the pyramid. Believe it or not, accounts opened under
the Jan Dhan Yojana today have a total balance of almost six billion
dollars.
The Jan Dhan Yojana has also transformed
the ability of the poor to make and to receive electronic payments.
Every Jan Dhan account holder is eligible for a debit card. India’s
banks and post offices are also being encouraged to operate ‘mobile
ATMs’. A mobile ATM is one where cash can be drawn and simple banking
tasks done through a hand held device.
We have provided a safety net through
new social security schemes. We have introduced three non-subsidised but
low cost schemes covering accident insurance, life insurance and
pensions. Because of their massive coverage the premia are low. There
are now over 120 million subscribers.
We have paid special attention to gender
justice and to empowering women. We have a new savings programme to
help pay for girls’ education with a special high rate of interest. To
relieve rural women from the health hazards of cooking with firewood, we
are giving 50 million new gas connections in poor rural areas. Under
our new self-employment financing programme (Mudra), over 70% of the
beneficiaries are women. More than 27 million new women-headed
businesses have been assisted. We have changed our policies to allow
women in combat roles in the armed forces. New rules are increasing the
representation of women on corporate Boards of Directors.
Agriculture remains India’s mainstay in
terms of providing livelihood. There was a tendency to deprive farmers
of subsidized fertilizer by diverting it for the production of
chemicals. A simple but very effective solution is neem-coating of
fertilizer which makes it unsuitable for diversion. We have moved
towards universal neem-coating of urea. It has already saved crores of
rupees of diverted farm subsidies and improved fertilizer availability
to farmers. It is an example of how simple reforms can be very
effective.
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We have introduced a Soil Health Card
nationally, which tells every farmer the condition of his or her soil.
It enables the farmer to choose the best crop and right quantity and mix
of inputs. This greatly reduces wastage of inputs and increases crop
yield besides protecting the soil. By reducing unnecessary chemical
inputs, it is also good for health of consumers. It reduces costs,
increases yields, improves the environment and protects the health of
consumers. 140 million soil health cards will be issued, requiring a
collection of over twenty-five million soil samples, and tested through a
nationwide network of nearly 1500 laboratories.
This brings me to an achievement that I
think even our worst critics do not dispute. This is the change in
levels of corruption. For many years, economists and other experts have
held corruption to be one of the main constraints on the growth of any
developing economy. We have taken decisive steps to curb corruption. I
have already referred to what has been done in public sector banks. We
removed discretion in allocation of key resources and moved to
transparent auctions of mines, spectrum and FM radio licenses and we
have plugged leakage through direct benefit transfer. We have revamped
our personnel management to ensure that senior positions are held by
persons of integrity. We have launched an on-going campaign against tax
evasion and black money. The poor are the greatest beneficiaries of the
reduction in corruption.
Looking to the future let me outline what I see as the path we will follow in the coming years.
Firstly, we will continue to have
disciplined and prudent macro-economic policies. I firmly believe that
sound macro-economic fundamentals are a necessary foundation for long
term sustainable growth.
Secondly, we will combine this with a
continued stress on inclusion and equity. This is to ensure the fruits
of development accrue not to a few, not to many but to all Indians. And
this will also mean continuing our attack on corruption.
Thirdly, we will continue to make
progress on improving the investment climate and Ease of Doing Business.
We want to make India a destination which not only welcomes business
but where it is easy to do business. We have largely achieved the first
by drastically liberalizing our foreign direct investment policies. We
have made a good beginning on the second and will continue to make
further improvements.
We will continue to strengthen the "Make
in India” initiative. It is not intended for only manufacturing for the
domestic market or import substitution. It is as much about making
world-class products and services for the whole globe. That is why, for
us, improvements towards free trade are important. It is very important
for us that developed countries open their markets, not only to goods
from countries like India but also to services. I see this as a win-win
proposition for the U.S. and for India. India is the future human
resource powerhouse of the world with a young hard-working population.
In my vision, a partnership between American capital and innovation, and
Indian human resources and entrepreneurship can be very powerful. I am
convinced we can strengthen both our economies through such a
partnership.
We will continue to make our tax
policies more predictable. We have made major strides towards
predictability by signing a number of Advance Pricing Agreements with
the United States. We are committed to taking this further. At the same
time, like the U.S., we are cracking down on tax evasion and unfair tax
avoidance.
We will continue to open up our defence
sector. I am aware that licensing policies can sometimes slow down the
process of investing in India’s defence sector. We are exploring a
simpler and more efficient project licensing approach for defence. In
the field of nuclear energy, we are purchasing six nuclear reactors from
Westinghouse which will mark a new era in our nuclear and scientific
cooperation. I was delighted when GE became one of the first companies
to make a major investment in the newly liberalized railway sector. It
is setting up a locomotive manufacturing plant in the relatively poor
state of Bihar. I expect many more such investments.
The river Ganga has a special
significance for India. The ‘Namami Gange” programme to clean the river
Ganga is on the verge of taking off. It will be a big priority over the
coming years. This project offers major opportunities for American
companies with their expertise in environmental engineering, water and
sewage treatment and the like. This project is a high priority for my
Government and our aim is to restore the Ganga to its pristine glory.
Ladies and Gentlemen, we have begun our
journey towards a transformed India. A transformed India, with one sixth
of humanity will mean a transformed world. The journey will be long.
But the progress we have achieved so far, convinces me that we will
reach our destination. I invite you to join us on that journey. It is a
journey which offers the exciting possibility of not only building a
better balance sheet for your company but of building a better India,
building a better America, and building a better world.
Thank you.
Ref: http://www.narendramodi.in/category/speeches
Ref: http://www.narendramodi.in/category/speeches
