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Chandrajit Banerjee, Director General, CII

2021: A year that embodies hope

There is much reason for hope in the new year. Several vaccines are ready for use and the Indian government has commenced a massive roll out across the country. Economic activity, which had come to a standstill in the initial months of the pandemic, has resumed and is accelerating steadily. In fact, the economic recovery in India has turned out to be much stronger than earlier expected, although many challenges remain. India has also been able to contain the spread of the virus quite successfully, as cases have moderated across all regions in the country.

Distributing the vaccine in a country like India with its large population and vast area is a big challenge. Fortunately, India has some advantages, being the largest manufacturer of vaccines in the world. India also has an existing cold chain for vaccine distribution and an electronic vaccine intelligence network (eVIN) to track vaccine availability on a real time basis.

As the vaccination programme accelerates across countries, the global economy will start looking up and be more open for business. Indian industry needs to take this opportunity to become a more competitive player with a greater share of global markets. The WTO expects the volume of global merchandise trade to rise by 7.2% in 2021 following a 9.2% contraction in 2020. Global supply chains are also shifting as countries reorient their production capacities. It can be hoped that countries such as India will emerge as reliable production hubs in 2021, with any hurdles in the path of investors being eased.

The reforms that have been unleashed by the government over the last few years together with the moves towards ease of doing business will build a momentum towards industrial rejuvenation in India.

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The reforms that have been unleashed by the government over the last few years together with the moves towards ease of doing business will build a momentum towards industrial rejuvenation in India. Businesses are ready to operate in the post-pandemic world using more sustainable business models and digital technologies. Worldwide, businesses are being restructured to become more climate conscious while smart technologies are enhancing their presence. The market will reward businesses that reorient their strategies in these directions and I expect a lot of winners will emerge in 2021.

As the economy begins to restore itself, one major challenge will be to create jobs as also to improve the quality of jobs. The experiences of workers, many of whom were migrant labourers, whose livelihoods were destroyed at the onset of the pandemic will not be forgotten. New jobs that are created must be accompanied with an improvement in the facilities provided such as housing and access to health and education. The share of formal employment needs to be increased, a trend that has already started and will certainly be enhanced in 2021. At the same time, informal employment and fixed term employment will come with greater social security.

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In 2021, the government will focus on rebuilding the economy. I believe that funds will be provided for massive investment in physical as well as social infrastructure. Healthcare will emerge as a priority sector where investment needs to be stepped up to improve long-term productivity of the workforce. Privatisation of public sector enterprises is likely to be accelerated to provide the funds to achieve these ends. A simpler and more effective tax system will be developed to enhance coverage.

I also expect to see the creation of a future ready financial sector in 2021. Financing India’s growth to achieve its ambition of reaching the $5 trillion size sooner rather than later would require a nimble and supportive financial sector. This would need several reforms including greater freedom to the private sector to participate in banking. Sorting out the problem of non-performing assets would be critical to reduce the stress in the banking system. Innovative solutions need to be found and I expect a new paradigm to emerge in 2021.

In 2021, I expect there will be greater focus on the quality of school education, as children get back to the physical school environment. Similarly, livelihoods will be restored in other services sectors where contact is important.

The pandemic has made the past year one of the most painful in recent history but fortunately it has ended with the creation of effective vaccines. It is therefore natural that 2021 embodies hope for a better future. It is essential that all stakeholders combine forces to make this a reality, with partnerships across countries, across public and private sectors, across government and civil society.

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