Text of PM’s address at India-Singapore Economic Convention

Mr. S. Iswaran, Minister for Trade and Industry, Hounorable Ministers and Dear Friends! It is a matter of great pleasure to be here with you. I am really happy to address the India-Singapore Economic Convention. My visit has been very productive and positive. I had excellent meetings with Singapore leaders today morning. We have concluded the Strategic Partnership which takes the relationship to a new level of engagement. We have set a high level of ambition for this relationship. Friends! our historical ties and cultural proximity are our assets. A large Indian Diaspora is enriching the life and work environment of Singapore. In recent years, economic engagement has been a key driver of our relationship. Singapore is our 10th largest trade partner globally. It is also the 2nd largest in ASEAN. Bilateral trade has expanded manifold after the conclusion of Comprehensive Economic Cooperation Agreement in 2005. Singapore has emerged as the 2nd largest source of FDI into India. Outward Indian FDI to Singapore has also increased in recent times. Singapore is now one of the top destinations for Indian investments. A significantly large number of Indian companies are registered in Singapore. Singapore companies also have a level of familiarity with Indian market due to involvement over the past few decades. Our companies are positioned to explore and develop promising engagements. With the significant and growing number of companies of both sides and of foreign companies in both markets, I expect even more exciting partnerships. • You have the habit of precision; India has the scope for expansion; • You are fond of going vertical; India’s development is both vertical and horizontal; • You are an exciting incubator; India is a vast laboratory; Thus, Singapore and India can work together in many promising areas. Last month, I had the opportunity of laying the foundation of two projects in India with participation of Singapore. One is the new capital city of Andhra Pradesh–Amaravati. Singapore is involved in preparation of the Master Plan for this new city. Secondly, I have laid the foundation stone for the fourth container terminal at JNPT, Mumbai which is being built in partnership with PSA, Singapore. We are also exploring collaboration with Changi Airport to operate two Indian airports. These are recent examples of the deepening of our economic partnership. Singapore is also an important and valuable friend of India in our global outlook. We regard Singapore as an essential ally in the implementation of our Look and Act East Policy. I am fully aware of the important role Singapore has played in the implementation of this policy. I look forward to working with Singapore in a bigger way. Beyond the bilateral scope, there are also significant opportunities through collaboration with third countries. One example is the ASEAN Economic Community which has come into effect. It is going to create a 2 trillion US Dollar market of 600 million people. It will further enable our businesses to jointly explore opportunities in the wider South East Asian region. The Regional Comprehensive Economic Partnership (RCEP), comprising ASEAN and its six Dialogue Partners, is another potential opportunity for our companies. Recently, in the India Africa Forum Summit held in New Delhi, Singapore was a special invitee. This is recognition of another dimension of India-Singapore togetherness. We can work jointly in the African countries. Ladies and Gentlemen! India is undergoing economic and social transformation on a scale and a speed that is unmatched in history. Our growth rate was 7.3% in the last year. World Bank has projected even better growth this year. Indian economy is the fastest growing economy among major countries. We are also working hard that the benefits of this growth reaches to the common man. We have launched major schemes on financial inclusion. Our strategy is to: • Energise the Economy. • Empower the people. • Fund the un-funded. • Secure the poor. • And enhance the income level of all. Money must reach the Marginalized. With this objective, we opened 190 million new bank accounts. Through them, we are trying to ensure direct transfer of benefits to the poor. This targeting is also bringing discipline in Government expenditure. We have also launched new insurance and pension schemes. Through a new Bank, called MUDRA, we are funding the small traders and businessmen. We have set time bound goals for providing access to housing, water, electricity and sanitation for all. Thus, India is now the next frontier of economic revolution. Our changing paradigm has created new opportunities for global investor community. These opportunities range from building 50 million affordable houses to setting up 100 smart cities; modernization of railway network and re-development of our railway stations to setting up new railway corridors; generation of 175 GW of renewable energy to transmission and distribution networks. Construction of National Highways, bridges, and Metro rail networks. Such a huge potential for creation of infrastructure and production of goods will not be available in any other country. More importantly, no one place on the earth can offer the customer base on such a massive scale. We are trying to harness this development potential through our policies and people. The campaigns like Digital India and Skill India are designed to prepare the people to take part in this process. We have witnessed massive growth in the number of start-ups in the recent past. Some of these have begun to challenge established global players. To tap this energy fully, we have recently launched the Start up India Campaign. Start up India, Stand up India. Friends! In past few months, the interest of foreign investors in India has gone up tremendously. However, there were a number of regulatory and taxation issues which were adversely impacting on their sentiments. We have taken very decisive steps to remove many of long the pending concerns. To give you some examples:- • We have expedited regulatory clearances including security and environmental clearance; • We have greatly liberalised the licencing regime; • We have increased the validity period of defence industrial licences up to eighteen years from three years; • We have taken almost 60% of the defence items out of the licensing process and liberalised a number of restrictions like end-use certificate for the exports; • We have clearly articulated that we will not resort to retrospective taxation; • and we demonstrated this position in a number of ways; • We have introduced the concept of composite sector caps for the FPIs and other foreign investors. • We have notified the regulations for the Alternative Investment Funds and; • We have rationalized the capital gains tax regime for Real Estate Investment Trusts; • We have modified the Permanent Establishment norms; • We have also decided to defer the implementation of the General Anti-Avoidance Rules for two years; • We have introduced the GST Bill in parliament; we are hopeful to roll it out in 2016; • A new bankruptcy code and a new IPR policy is being drafted; • The Company Law Tribunal is going to be formed soon. • Our system for transparent auction and allocation of key natural resources like coal, spectrum, and iron ore has now become stable. These are just a few examples. We are working hard to make sure that our tax regime is transparent and predictable. We are also keen to see that genuine investors and honest tax payers get quick and fair decisions on tax matters. To this objective we have already made a number of corrections. As a result of our initiatives:- • The sentiments for inflow of foreign investment are turning into commitments; • FDI inflows have gone up by 40% compared with previous year’s corresponding period. • Perceptions are turning into positive outcome:- • We have jumped 12 ranks in the latest ranking by the World Bank on ease of doing business. • India climbs to become the world’s 7th most valued nation brand with a 32% sprint in brand value. • India has consistently been ranked as the most attractive investment destination by several agencies and institutions. • India has also improved its UNCTAD ranking of investment attractiveness. We were 15th place so far. Now we are at 9th place. • India has also jumped 16 places on the World Economic Forum’s global competitive index. • MOODY’s have upgraded the rating of India as positive. Thus, just in eighteen months, we have successfully restored the credibility of India in the eyes of global players. As soon as my government took over, we started liberalizing the FDI regime alongwith other reforms. We allowed 100% FDI in railways and enhanced the FDI limit to 49% in Defence and Insurance. We are also conscious of the last mile operational issues in such policies. In that spirit, we are finetuning the procedures also. Early this month, we have taken very dynamic steps to further open up the economy for FDI. With this last round of reforms:- • India is among the most open economies for FDI. • Some new sectors have been fully opened for FDI. • For most of the sectors, FDI clearances are now on automatic route. • In addition to Greenfield areas, many sectors can freely absorb FDI in Brownfield projects. This includes Roads, construction and medical devices. • Entry and exit conditions have been greatly relaxed for FDI. Friends! We are keen to scale up investments in next generation infrastructure including digital networks and clean energy. In addition to the core infrastructure, we are keen to invest in our social, industrial and agri-infrastructure to give better income and quality of life to our people. With tight control over expenditure, we have greatly increased capital investment by the public sector. To leverage this, we are setting up National Investment and Infrastructure Fund. We are also coming up with Tax Free Infrastructure Bonds with a view to broaden the corporate bond market. This will also provide long term finance for infrastructure. For infrastructure, we have also decided to launch Rupee Bonds in some countries. Singapore could be among them. We are quite eager to work with Singapore in this regard. Friends! About 800 million people in India are below the age of 35 years. Their aspirations, energy, enterprise and skills will be the force for India’s economic transformation. But the immediate challenge is to productively employ the youth. For meeting this challenge, we need to provide a huge push to manufacturing which has stagnated at around 16% of the GDP for several decades. This share must reach around 25% in the short and medium term. With this in view, we have launched the “Make in India” initiative. We are working on all fronts to make India a global manufacturing hub. We are creating the global skill pool to establish a modern economy with a world class manufacturing sector. To achieve these objectives, apart from vigorous exercise for ease of doing business, we have fast tracked approvals and clearances for industry and infrastructure. The hall mark of our strategy is Good Governance which is Participative and Policy Driven. Through PPP, we are encouraging private investments in areas where earlier only government used to invest. We are also divesting our stake in the public sector enterprises, to instill market discipline. We are consistently working to integrate our economy with the rest of the world. I hope to further dedicate the next three months to address even the remotest issues affecting free flow of capital and business to India. Friends! Whatever we are doing; it is driven by two basic commitments: One is that our people should be in the center. It is for them that we want investments. Our faster growth will transform lives of one sixth of global community. The second commitment is towards our climate, our planet, our Nature. Our commitment to mitigate the dangers of climate change do not arise from Economics or Politics. They also do not arise from Fear or Favour. They arise from our fundamental belief that nature is our Mother. Nature provides and sustains our life; hence we must nurture it. It is an article of faith. I assure the Global community that we will do more than required. We will stretch ourselves to do more than what we can normally do. Both these commitments generate a wave of economic opportunities and activities which cannot be matched by any other country. They also open up enormous opportunities for investors. To sum up; I would like to say that In the last eighteen months, • Reforms are happening in a big way. They are now reaching to the last mile; • Reform is to Transform the systems so that they Perform; • Simply put, they aim at enabling the people to realise their potentials and dreams; • Putting even more simply, it means more charm on the faces and less forms in offices; • In addition, new frontiers and Deeper Foundations for financial markets have been laid; • All together, Runways for take –off of the economy have been made. Recently, the IMF chief has said that India is a bright spot in the Global economy. I did not want to wait for that brightness to reach to you on its own. Hence, I am here. I am here to invite you to India in a bigger way. I have also come to assure you that I am there to carefully hold your hands. Thank you! Very much, thank you.