India Economic Summit 2019

October 03, 2019: Mr. Ajit Gulabchand, Chairman and Managing Director, HCC attended the World Economic Forum’s 33rd edition of the India Economic Summit 2019 held on October 03 & 04, 2019 in New Delhi. The event was jointly organised by the Ministry of Commerce & Industry and industry body CII. More than 800 leaders from 40 countries participated in the event, with co-chairs including Sheikh Hasina, Prime Minister of Bangladesh, and Heng Swee Keat, Deputy Prime Minister and Minister of Finance for Singapore.

Mr. Gulabchand participated as a panelist in a session on Infrastructure development titled “The Infrastructure Enigma”. The session was moderated by Ms. Suhasini Haidar, Diplomatic Editor, and Deputy Resident Editor, Hindu, India. The other panelists include Mr. Suresh Prabhu, Indian Prime Minister’s G20 Sherpa, Mr. Hemant Kanoria, Chairman, SREI Infrastructure Finance, India and Mr. Eric Holcomb, Governor of Indiana, USA.

Among some of the pressing matters impeding growth in the infrastructure sector, Mr. Gulabchand raised the issue of agencies not honouring contracts. He said “A central issue plaguing India’s infrastructure sector is the paralysis in decision-making, which is holding up projects and payments. An unintended consequence of the government’s fight against corruption is that bureaucrats are not taking decisions for fear of being accused of wrongdoing. The result is a “culture of don’t pay contractors”. Infrastructure companies are owed huge amounts of money, a fact that even Finance Minister Nirmala Sitharaman has acknowledged.”

He further pointed out that “An estimated $300 billion investment in Infrastructure is coming in from the private sector. Hence a relationship of trust between the Business and Government needs to be created. It is not simply that contractors are just not being paid....contracts are not being honoured which in turn stalls a project. As per last year’s index, India still ranks 163 when it comes to enforcing contracts. Contractors cannot cope with the uncertainty and instability, which is why very few foreign firms are willing to invest in the country.”

Voicing his concerns over the issue of dispute resolution he said “Currently, if a dispute arises over any aspect of an infrastructure project, there is no effective mechanism to resolve it. This is an issue the government must focus on when creating any new policy. Given the scale of infrastructure projects, when mistakes are made, the costs of correcting them are high. Disputes need to be resolved quickly to avoid delays, otherwise it leads to rise in user charges.”

The summit also brought together leading cultural figures, technology pioneers and scientists to help accelerate the adoption of Fourth Industrial Revolution (4IR) technologies, such as artificial intelligence and drones. The discussions ranged from India-US trade relations to India’s economic reforms, to the digital divide in the internet economy to more pressing issues such as healthcare innovation, sustainable mobility, skill development, and the economic slowdown.