Joint Inauguration of the Indo-German Business Summit in Hannover Friends

Text of PM’s address at the Joint Inauguration of the Indo-German Business Summit in Hannover


I am really happy to be here in the Hannover fair. It is an added pleasure to talk to you that too in the presence of Chancellor Merkel. Myself and Chancellor Merkel had a very good interaction over dinner last night. You also must have met a number of Indian companies and CEOs. I believe that the participation in Hannover fair would be very useful for both sides. I request you to visit the India pavillion and the stalls of our State Government and private companies.

You will be able to see for yourself the winds of change in India. We are very keen to develop the sectors where you are strong. We need your involvement. The scope and potential, the breadth and length of infrastructure and related developments is very huge in India. Just to give you some examples:

We have planned to build 50 million houses by 2022. In addition, we are going to develop smart cities and mega industrial corridors.

For this purpose, we have refined our FDI Policy in construction. We have also come up with a regulatory framework for this sector.

We have targeted 175 Giga Watt of renewable energy in next few years. In addition to generation, the issues of transmission and distribution of electricity are equally important for us;

We are modernizing our Railway systems including signals, and railway stations. We are planning metro rail in fifty cities and high speed trains in various corridors.

Similar is the case with Highways.

We are putting up new ports and modernizing the old ones through an ambitious plan called Sagarmala;

Similar focus is on upgrading the existing Airports and putting up regional airports to enhance connectivity to places of economic and tourist importance.

In financial services too, we are moving towards a more inclusive and faster delivery of financial products including bank loans and insurance.

For this purpose, we opened 140 million bank accounts; increased FDI in insurance upto 49% and have set up MUDRA Bank.

We also announced innovative schemes for insurance and pension to enhance social security for our citizens.

We also want to promote manufacturing in a big way particularly to create jobs for our youth. For this purpose, we have launched a campaign called “Make in India”.

All this is a historic opportunity for the German companies. You would already be knowing the direction of my Government and the steps we are taking. We have committed ourselves for creating and improving the business environment. I can assure you that once you decide to be in India, we are confident to make you comfortable.

Germany ranks 8th among foreign investor countries in India. About 600 Indo-German Joint ventures are presently operating in India. The purpose of my being here and participating in the Hannover Fair is to highlight that there is more potential in Indo-German economic collaboration. Though we have a vibrant relationship, our economic partnership is not as much as both countries would like to have. The flow of investments from Germany is well below the potential and less than Indian investments in Germany.

Many more German companies have the possibility of investing in India to take advantage of India’s potentials. The potential lies in Manufacturing as well as infrastructure and in skill development for that purpose. I know that the reason for this situation may not be from German side. It is from the Indian side also.

I am here to assure the German companies that India is now a changed country. Our regulatory regime is much more transparent, responsive and stable. We are taking a long-term and futuristic view on the issues.

Lot of efforts have been made and are still underway to improve the ‘Ease of Doing Business’ in the country.

Reducing the complicated procedures, making them available at one platform, preferably online, simplifying the forms and formats has been taken up on war footing.

Definite mechanisms for hand holding have been set up in the form of hub and spoke. Invest India is the nodal agency for this purpose.

We do believe that FDI is important and it will not come in the country without a globally competitive business environment. Therefore, in this year's budget we have rationalized a number of issues which were bothering you. In particular,

We have removed lot of regressive taxation regimes. In our very first Budget, we said we will not resort to retrospective taxation. And if such issues do arise, they will have to be reviewed at the highest level. We have taken bold steps of not dragging the litigation in a few cases where we felt that the steps of the previous government were not on right lines.

In this budget, we allowed Tax pass through for AIFs, rationalization of capital gains of REITs, modification in PE norms and deferring the implementation of GAAR for two years. We are constantly working to improve the business environment further.

We are trying to introduce an element of transparency and predictability in taxation system.

We have fast tracked approvals in industry and infrastructure. This includes environmental clearances, extending the industrial licences, delicencing of defence items, and simplification of cross-border trade.

Within a very short time, we introduced GST Bill in Parliament.

Such measures have helped in building up an enhanced investor confidence. The sentiments for private investment and inflow of foreign investments are positive. FDI inflows have gone up by 36% during April-2014 and January-2015 against the same period in previous year;

  Our growth rate is about 7%-plus. Most of the international financial institutions including the World Bank, IMF, UNCTAD, OECD and others are predicting even faster growth and even better in the coming years. MOODY’s have recently upgraded the rating of India as “positive” on account of our concrete steps in various economic segments.

It is the effort of my Government to encourage innovation, R&D and entrepreneurship in the country. In this year’s budget, we have set up some innovative institutional mechanisms for that purpose.

Similarly, for infrastructure development, we have taken some far reaching steps.

First of all we have made an all-time high allocation for Roads and railways sectors.

In addition, we are setting up India Infrastructure Investment Fund.

We have also allowed Tax free Bonds in the Infrastructure sector including roads and railways.

I wish all success to the Hannover Messe. I also wish all participants good luck and progress. I also take this opportunity for inviting more and more German companies to India. I assure them all support from my side.

Friends! Indo-German partnership should and will flourish. I expect very good outcome from this coming together. Let us work together in mutual interest and for welfare of the people of the two great countries.

At the end, it is my advice to you to come and feel the change in India’s regulatory environment. Please do not go by old perceptions.

The symbol of lion for make in India has been chosen very carefully. We know that our biggest need today is to create jobs for our 65% population which is young. Hence, Make in India is the need. Hence, the lion because a lion cannot be stopped. We are confident that our journey to make India a global manufacturing hub cannot be stopped that too by our own rules and regulations. We must and we will make corrections wherever it is required.

Once again I invite you to India. I assure you of my personal attention in your success while you are in India.

Thank You very much.


English rendering of PM's Op-Ed in Frankfurter Allgemeine Zeitung

In May last year, in what was the largest elections in the history of mankind, the people of India voted my Government into office. For the first time in three decades Indian voters gave a clear majority mandate to a government. The verdict was for change and for good and effective governance. It was also a call for development reflective of growing aspirations of India’s youthful millions.

In the last 11 months, we have come a long way in keeping this promise. We have re-energised the Indian growth engine. The credibility of our economy has been restored. India is once again poised for rapid growth and development. It is the only emerging economy where growth rate is rising. The prospects are even better.

This has not happened by chance. My government has earnestly taken up the challenge of development and economic transformation of India. For us, development is not a mere political agenda; it is an article of faith. We have initiated specific policies and actions to realise our vision for New Age India with a clear set of economic goals and objectives. Our focus is not merely economic growth but an inclusive development. This requires creating jobs, upgrading skills, raising productivity, benchmarking quality with global standards. Our aim is to completely eliminate poverty and to propel all Indians into a life of purpose and dignity within a generation. My own life-experience and belief in the role of good governance in India’s economic development has convinced me that this noble objective can be achieved.

Generating jobs for India’s youthful population is a key to harnessing India’s demographic advantage. This can be achieved only when we significantly and quickly ramp up our manufacturing capabilities. To meet this objective my Government has unveiled the "Make in India" initiative. This is a win-win for all. The employment opportunities that new manufacturing will generate will enhance the purchasing power of our people. This in turn will create a market for more trade and investment. With 65% of our population below the age of 35, the possibilities that India's growth presents for global economic prosperity are immense. Through our "Act East” and "Link West” policy, India has the potential of becoming the middle ground for East and West as a manufacturing hub that serves both our vast domestic market and becomes a base for global exports and general well-being.

Our strategy for "Make in India” requires urgent creation of new infrastructure. The substantial enhancement in financing in the federal budget for highways, railways and energy is a step in this direction. Work has begun on the development of Delhi-Mumbai Industrial Corridor.

My Government has pledged a stable and transparent tax regime, reducing corporate taxes and implementing a single Goods & Services Tax in 2016.

We recognize that the availability of a skilled work-force is a prerequisite for manufacturing growth. My Government is giving the highest priority to the Skills India programme. We will focus on promoting models of vocational training according to specific needs of local industry, and to adopt best practices from abroad.

We are aware that all development must be environmentally sustainable. India has always cherished its environment. This is deeply ingrained in our age-old culture and civilization. Our revised target for renewable energy capacity of 175,000 MW by 2022 is a reflection of our commitment.

Growing urbanization in India is one of our greatest challenges. The population in our cities is projected to double in 10 years. Our focus on development of Smart Cities is aimed at providing the basic necessities of affordable housing, clean water and a safe environment for our people.

As a former Chief Minister of the State of Gujarat, I recognise that these ambitious objectives can be realized only through cooperation between the federal Government and our twenty nine States. We are creating structures to enable them to become partners of our exports and investment strategy. We have also adopted a strategy of cooperative and competitive federalism where states spur each other into greater effort through a healthy competition for economic growth and prosperity.

International support and collaboration is equally critical to achieving our objectives. I have therefore sought to build a foreign policy which is an integral part of our national development strategy. My interactions with leaders of USA, Russia, France, Japan and China have all aimed at creating enduring partnerships with shared stakes in global development and well-being.

Germany enjoys a special place in this context. We share a strategic partnership based on our common values. India desires a mutually beneficial partnership for growth and prosperity with Germany. Our priorities fit well with Germany’s expertise. India’s development needs can become business opportunities for German industry.

We take satisfaction from the presence of more than 1600 Indo-German collaborations Nonetheless, a great deal of potential remains unrealized. Higher levels of investments are possible and indeed desirable. Germany is globally renowned for its engineering, innovation and skills. The capacities of your Mittelstand and family-owned businesses are well known. I invite them to come to India.

My visit to Germany and India’s participation at the Hannover Messe as a Partner Country is aimed at realising the immense possibilities that exist between us. In my discussions with Chancellor Merkel and with captains of German industry, I intend to share our sense of optimism and confidence in our future plans. I will also listen carefully to learn what more we can do to address concerns of German entrepreneurs with regard to investment and manufacturing in India.

We see Germany as our preferred partner in developing skills of young Indians. We also want to learn from Germany's path-breaking experiences in renewable energy. We wish to replicate your success in solar roof-top projects and off-grid solar and wind power solutions, as well as your expertise in grid integration and management. Our smart city project can utilize your technologies to achieve water, waste and urban development objectives. We admire Germany's achievements in the application of technology solutions to meet environmental challenges. You are also our natural ally in my Government's "Clean India" initiative. We also want to benefit from Germany’s experience in cleaning the River Ganga. We invite your transport companies, including your railways, to assist us in the modernization of our transport networks. Your logistics and infrastructure companies can contribute to ongoing development of industrial corridors in India.

I visualize India as a key engine of global growth. Our democratic principles and practices are guarantors of stability. We have a free media and an independent judiciary that allows all opinions to be aired without fear. We believe in "Rahein Saath Badhe Saath” (stay together-grow together). There is no other way forward. Mankind's progress in this century depends on cooperation and collaboration. Conflict is unthinkable. So is poverty which Gandhi called the worst form of violence. If we can take all Indians together into a better socio-economic future, I believe that the world we share will be a better place for all.


Progress of North East Rural Livelihood Project

North East Rural Livelihood Project, a central sector externally aided multi-state project was launched in March 2012. The main objective of the project is to improve rural livelihoods, especially that of women, unemployed youth and the most disadvantaged in the four participating North East States. The total project cost has been estimated at US$ 144.4 million with World Bank assistance of US$130 million and Government of India’s contribution of US$14.4 million (at 10%). The financial project has been made for five years with the mandate to implement in two districts each of Mizoram, Nagaland and Sikkim and five districts in Tripura. About 3 lakh households will directly benefit from the project across 11 districts, 62 blocks and 1645 villages.

The main thrusts of the project are to build community based organizations such as Self Help Groups (SHGs), SHG village Federations, Community Development Groups (CDGs), Producer Organizations etc. and strengthen the existing ones; to nurture and build capacity of the Community-Based Organization Leaders for enabling them to participate in decision making and development process; to provide financial support for promotion of livelihood activities; to facilitate technical support, expert services and knowledge transfer through partnership; to provide vocational trainings and skill trainings for self-business and job placement; to promote a few livelihood clusters; to provide necessary linkages for institutional finance; and to develop value chains on certain potential products.

The desired outcomes of the project include (a) making the SHGs promoted and supported by the project sustainable, (b) increasing the income level of the members of the SHGs (at least 60% of them) and disadvantaged households by 30% in real term and (c) providing jobs or self employment to the unemployed youths through various skill trainings, entrepreneurship development trainings, vocational trainings and management development trainings.

Initially, the project had focused on institution building and strengthening of existing community institutions. With minimum coverage of 70% of the households of the project villages, institution building has almost saturated in Mizoram, Nagaland and Sikkim. Good progress has also been made in two districts of Tripura. By end of March 2015, the project has formed 13,685 SHGs, 142 SHG Village Federations and 1351 CDGs. Having the solid platforms of development laid down, the project is now focusing more on creating resilient livelihoods for the community people. With a view to contributing towards the corpus funds and also to provide livelihood support, the project has so far provided Seed Capital to 11049 SHGs and livelihood Funds to 5780 SHGs amounting Rs.22.09 crore and Rs.28.24 crore respectively. Another Rs.6.52 crore has been released for entry point activities and execution of Community Development Plans. The project has also started 4 model livelihood clusters with approximate investment of upto Rs.100 lakh each on piggery, goatary and dairy.

NERLP has also put a target of providing skill trainings to about 20,000 unemployed youths from the project districts. For organizing skill trainings on different trades, the project has entered into MOUs with 16 Voluntary Training Providers who are either government/semi government organizations or NSDC empanelled. As on date, 1045 youths have been trained out of which around 519 got placement in various parts of the country mainly in retail, hospitality, IT and health care sector. Another 393 candidates are getting placement very soon and 216 youths are undergoing training.

Apart from physical achievement, the financial achievement of the project for 2014-15 has been impressive. As against the budget allocation of Rs.90.00 (RE), the project has made a total expenditure of Rs.72.13 crore. This under-expenditure has been mainly due to delayed releases of the RE budget of Rs.60 crore sometime in the first week of March 2015.


Measures taken for Management of Recent Rains/Hailstorms

In the month of February- March 2015many States like Gujarat, Punjab, Himachal Pradesh, Haryana, Maharashtra, Bihar, Uttar Pradesh, Madhya Pradesh, Rajasthan, Jammu & Kashmir, and West Bengalwere hit by hailstorm followed by untimely excessive rainfall.

As State Government is empowered to undertake necessary relief measures in the wake of natural calamities like, drought, hailstorm, pest attack & cold wave/frost from State Disaster Response Fund (SDRF) which is readily available with them, all State Governments have been requested on 19.03.2015to take immediate steps to address the notified calamities by utilizing the funds available under SDRF. They were also advised to submit memorandum as per extant procedure/norms, if additional financial assistance is required from National Disaster Response Fund (NDRF) and in the mean time utilize contingency fund of the State, if SDRF is exhausted. So far memoranda have been received from Uttar Pradesh, Rajasthan and Haryana. Inter Ministerial Central Teams (IMCTs) have been constituted for Uttar Pradesh and Rajasthan to visit the affected States to assess the ground situation and recommend financial assistance. As per the information available about SDRF (as on 25.03.2015), balance SDRF available with the State Government of Haryana is Rs.1791.06 crore. In the memorandum the Haryana Government has demanded Rs.1135.91 crore from NDRF. Since, the amount demanded by the State of Haryana is available with the Government under SDRF, a draft letter from Secretary (A&C) to Additional Chief Secretary is under submission requesting the Government to utilize the SDRF fund available with them.

Secretary(A&C) has written a letter dated 30.03.2015to Secretary, Department of Financial Services, Ministry of Finance highlighting major difficulties faced by the farmers in repayment of crop loans taken by them and requested to issue directions to banks in this regard as well as consider whether the benefit could be consider for restructured loans. All affected States i.e.,Gujarat, Punjab, Himachal Pradesh, Haryana, Maharashtra, Bihar, Uttar Pradesh, Madhya Pradesh, Rajasthan, Jammu & Kashmir, and West Bengal have been also requested vide letter dated 01.04.2015of Secretary (A&C) to take appropriate steps to provide relief to farmers under various programmes of Government of India and in case of shortfall in funds, submit memorandum seeking additional fund under NDRF.

Measures taken by DAC to mitigate the drought like condition in Kharif, 2014-15.

i. Implementation of Diesel Subsidy Scheme for protective irrigation of crops with an allocation of Rs.100 crore;

ii. Enhancement of ceiling on seed subsidy to partially recompense the farmer for the additional expenditure incurred in resowing and/or purchasing appropriate varieties of seeds;

iii. Implementation of drought mitigating interventions on perennial horticulture crops with an additional allocation of Rs.700 crore under Mission for Integrated Development of horticulture (MIDH);

iv. Implementation of Additional Fodder Development Programme (AFDP) as a sub-scheme of Rashtriya Krishi Vikas Yojana (RKVY) with an allocation of Rs.100 crore during 2014-15 for ensuring availability of fodder;

v. Waiver of duty on import of de-oiled soya extract, groundnut oil cake, sunflower oil cake, canola oil meal, mustard oil cake, rice bran and palm kernel cake to increase availability of feed ingredients.

In addition, States were advised to keep aside 10% of funds available under RKVY and other schemes for undertaking appropriate interventions to mitigate any situation arising out of deficient rainfall.

De-Reservation of remaining 20 items reserved for Micro and Small Enterprises Sector

An Advisory Committee constituted under Section 29B(2C) of the Industries (Development & Regulation) Act, 1951 on de-reservation periodically evaluates products /items reserved for exclusive production by Micro and Small Enterprises. India has opened up its economy since 1991 through a forward looking Policy which led to de-licensing of items. Over the years list of items reserved for manufacture by MSE Sector has been reduced from over 800 to 20. The Advisory Committee in its meeting, held on 20.10.2014, noted that with the import liberalization, all remaining items are allowed for imports. Thus, there is no prima facie justification for continuation of reservation of manufacturing in the MSE Sector since such reservation may inhibit the possibilities based on technologies, economy of scale, etc. vis-à-vis the imported items.

On the recommendation of Advisory Committee, Government of India vide Notification S.O. 998 (E) dated 10.04.2015 have decided to deserve remaining 20 (Twenty) items presently reserved for exclusive manufacture by MSE Sector. Accordingly following items are de-reserved:-

(i)Pickles and Chutneys, (ii) Bread, (iii) Mustard Oil (except solvent extracted), (iv) Ground Nut Oil (except solvent extracted), (v) Wooden furniture and Fixtures, (vi) Exercise Books and Registers, (vii) Wax Candles, (viii) Laundry Soap, (ix) Safety Matches, (x) Fire works, (xi) Agarbatties, (xii) Glass Bangles, (xiii) Steel Almirah, (xiv) Rolling shutters, (xv) Steel chairs – all types, (xvi) Steel tables – all other types, (xvii) Steel Furniture – all other types, (xviii) Padlocks, (xix) Stainless steel utensils, (xx) Domestic utensils – Aluminium.

The above policy initiatives have been taken to encourage greater investment, including the existing MSME units, to incorporate better Technologies, Standard and Branch Building to enhance Competition in Indian and Global markets for these products.


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