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'India Inc needs to be more competitive'

Leading the country's premier industry association is no cakewalk, especially when the economy is in a state of flux. Not surprising then, that MindTree Consulting founder and chairman Ashok Soota has not had a moment to spare since he took over as the president of the Confederation of Indian Industry four months ago.

The move hardly came as a surprise, for Soota had been holding various CII over the past few years. Besides, Soota has come to be known as a man who can bring success to whatever he touches.

While Azim Premji has been regarded as the visionary behind the metamorphosis of Wipro from a consumer product company to a major IT firm, Soota was widely acknowledged as the man who actually carried out this transformation. Now, he heads IT start-up MindTree in Bangalore.

Soota has taken up the new responsibility with enthusiasm. The Confederation of Indian Industry works to create and sustain an environment conducive to the growth of industry in India, partnering industry and government alike through advisory and consultative processes.

It is the apex body of Indian industry. It is a non-government, not-for-profit, industry led and industry managed organisation, that plays a proactive role in India's development process.

A facilitator, CII catalyses change by working closely with government on policy issues, enhancing efficiency, competitiveness and expanding business opportunities for industry through a range of specialised services and global linkages.

CII has 35 offices in India. It also has units in Afghanistan, Australia, Austria, France, Hungary, Israel, Singapore, South Africa, UK, USA and institutional partnerships with 199 counterpart organisations in 92 countries. CII serves as a reference point for Indian industry and the international business community.

Soota shared his plans for the CII in an exclusive interview with rediff.com's M D Riti in Bangalore recently.

You have taken charge as the president of the CII at a crucial time. India is trying to regain growth speed. What do you see are the challenges before you in your new role as the CII president?

While I believe that the Indian economy will continue to be one of the fastest growing economies, but the biggest challenge ahead for India Inc is to be more competitive.

CII has identified a number of issues that need to be addressed, both, by the industry and the government in achieving this.

Do you think that the IT industry should continue to be the darling of industrial bodies? Or will you now pay equal attention to the development of manufacturing and other sectors too?

CII's membership has acquired the widest profile for any industry body in India over the past decade and today cuts across all sectors of the economy.

However, the engineering industry has been the root of our organisation and we are proud of it. Yet, our coverage has gone well beyond it.

Manufacturing competitiveness will be a key focus area, especially in the year ahead, since we believe that the economy cannot grow at an over 8 per cent rate of growth only on service sector growth.

Can you tell us about the new cell CII is planning to set up for entrepreneurs in the US?

CII has set up its first ever national committee outside India - CII's US IT Committee. This committee's role will not be limited to entrepreneurs in the US, but will represent the interests of the Indian IT industry.

The IT committee in the US would primarily aim to provide a forum for Indian companies with operations in the US to exchange views on market trends in the US and establish norms for healthy competition.

The committee's role would also include safeguarding the India brand equity and interacting with the Bush Administration on issues such as the totalisation agreement and visa issues. The committee is headed by Vijay Thadani of NIIT.

You say the government should attempt more e-governance to provide a boost to India's economy and competitiveness. How do you think e-governance can achieve this?

One of the action points identified for the government is to utilise information technology in all areas of governance in order to improve efficiency, bring about transparency and accountability.

A CII report on e-governance has identified four steps that the government needs to take to facilitate implementation of e-governance.

1. Establish required infrastructure.
2. Evolve the appropriate legal framework.
3. Effectively manage cultural issues that may arise due to the adoption of e-governance.
4. Implement a process of e-procurement for the government.

Also, key departments with large and frequent public interface such as tax administration could be the first to implement e-governance.

Would you say that strengthening the corporate governance culture in the Indian industry will make any significant impact on ethical standards in Indian industry?

Among business and industry associations, CII took the lead in corporate governance in 1996, and was the first such body that made a clear case for independent directors, the important role of audit committees and adopting good board practices in its study - Desirable Corporate Governance: A Code.

Adopting internationally accepted codes of corporate governance, not just in the letter of the law - to adhere to the SEBI's mandatory code - but in spirit, would definitely improve ethical standards in Indian industry.

CII plans a women's panel to empower women entrepreneurs. Does this not presuppose that women are a breed apart? Women are struggling to be accepted as a part of the mainstream, are you not marginalising them by setting up a separate committee?

CII believes that a pre-requisite for economic growth and development is also the development of women. The CII Women's Committee, under the able leadership of ICICI Joint Managing Director Lalita Gupte would work towards addressing various issues related to women's empowerment such as education, health and enterprise.

The committee's focus, therefore, is not on women entrepreneurs or those in the workforce.

The Indian IT industry seems to be sliding down the value chain. How do we move up the value chain?

As India's ambitions in IT are large, the coverage must span the entire spectrum and the challenge is to move up the value chain without vacating or surrendering the volume business - after all, the base of the pyramid is larger.

Business Process Outsourcing is part of a completely new segment of IT Enabled Services which has its own value chain with call centers at the low end. BPO is actually quite high on this value chain.

What do you propose to do to ensure that India's growth rate does not slip too badly in the current fiscal year?

CII has identified eleven areas on which it would work closely with the government to ensure that the reform momentum is maintained.

These are: WTO and global trade issues, enhancing FDI inflows, tax reform (particularly implementation of value-added tax), financial sector reforms, agricultural reforms, passage of important economic legislations, development of new emerging champions of the services sector, infrastructure development, revival of the manufacturing sector, implementation of e-governance and simplification of procedures in the small- and medium enterprises sector.

You have said that the CII plans a committee to facilitate development in the North East. Previous government and industry efforts mostly failed. How do you propose to be different this time?

The basic objective of the new CII committee for the North East would be to promote human resource training, healthcare and computer literacy in the region.

To work towards these objectives and to ensure implementation, the CII office in Nagaland will soon be supplemented by another office in Guwahati. Therefore, CII's physical presence in the region will be the key to ensuring that we carry out our proposed initiatives.

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