 Well, this is the exciting conclusion of what I think has been a very productive full-day event here at CSIS Looking at how the United States can actually engage India on some of the important programs that the Modi government has initiated Whether it's skills development make in India smart cities And it's really a privilege and an honor to get to welcome finance minister Jaitley to his first trip to Washington And indeed the United States since taking over the role as finance minister at the government of India So here to do introduce the finance minister is dr. Ramesh Wadwani. You want me to do it? Okay? Okay, I'll take the honor myself. I'm thank you So minister Rune Jaitley holds three ministries simultaneously the Ministry of Finance the Ministry of Corporate Affairs and the Ministry of Information and Broadcasting Which really is a strong sign of his abilities and the trust that Prime Minister Modi and his colleagues have in his intelligence and abilities He already has made a strong mark on the finance ministry's and taking it over less than a year ago ushering in key fiscal reforms such as devolving more spending which got a lot of attention today in the program so far to the states lifting FDI caps and key sectors such as insurance and Maybe on the verge of a major domestic tax overhaul the goods and services tax Which has also been the subject of much discussion today at the proceedings a lawyer by training minister Jaitley rose to become a senior advocate before the Supreme Court of India But drawn to politics he became a national executive for the BJP back in 1991 During the last NDA government from 1998 to 2004 He held a series of important portfolios in that government as well including the Ministry of Law and the Ministry of Commerce and Industry And even while his party was in opposition in the last 10 years his party gave him important leadership positions Including his leader of opposition in the Rajya Sabha So we warmly welcome to finance minister Rune Jaitley to the stage here at CSIS For his first remarks in the United States and taking over this role. Minister Jaitley the floor is yours, sir Mr. Richard, you're also Dr. Ramesh Badwani Mr. Nayanan ladies and gentlemen Well, I'm extremely Delighted to be here during this day log Conference that you have on deepening the US India commercial ties and I've been asked to Speak on India's demographic transition The opportunities for partnership But I do realize that the Width of the subject really would go much beyond The normal parameters of a subject like demography where India's working population and if I take The lower base of the working population literally increases by millions every year one estimate is that the population between 15 and 59 years Was 58 percent of our population in 2001 And in 2021 it is expected to be about 64 percent of our population So that broadly indicates that The percentage of Younger working hands in India Is unusually large and Therefore it is incumbent for any government any political system To meet the challenge of providing jobs to these people skills to these people Provide good health good education So that they can be prepared for a much larger role in the years to come. How do we? foresee Over the next few years Coping up with this challenge. I think the first obvious answer is That India's own normal in terms of its growth rate Has to target Anything close to a double-digit India growing at 5% 6% even 7% Is not an India which is going to face up to this challenge And I do believe that India has that potential To make 9 to 10 percent its new normal in the years to come How do we reach that roadmap and once we achieve that? To generate jobs For the ability of this Population is going to be Though challenging reasonably possible the roadmap which we've currently laid for ourselves the first aspect of that is That we are very strongly strengthening all our regional our state provincial governments Financially we've seen an era where all our state governments Literally had to run to the center for resources Today, it's a different ballgame altogether Conventionally we have been speaking and paying lip sympathy to a commonly used phrase in India, which is cooperative federalism But we actually now see it in action in the new partnership between the center and the states The revenue of the states has been hugely increased So that they can invest a lot more both in social infrastructure and physical infrastructure They can invest a lot more in their poverty alleviation schemes So each state this year onwards is Going to get 10% more than what it did in the previous years This has also led to another form of federalism in India Which we've now started referring to as competitive federalism State after state is competing with each other. They are competing to move investments. They are competing to Provide a better infrastructure. They are competing to create better universities and so on Now that's that's a process which is on the second emphasis we've which we've laid down is increased Significantly our investment in infrastructure in this year's budget itself my expenditure on infrastructure exceeded About 12 billion dollars Now our main emphasis is To start rebuilding our national highways. It was a great program which was started when Mr. Vajpayee was in power Last few years it slowed down and slowed down significantly and Therefore a lot of public investment is now being put both into the railways both in National highways in rural roads in fact one of the advantages that we've had of the lowering of the oil prices That through a process of sess We've converted as very significant part of the lowering of the oil prices a lot of it goes to the Has been passed on to the consumer But a very significant part which comes as a sess to the central government is being diverted into these three programs rural roads highways and railway infrastructure emphasis on Manufacturing Because that's where the jobs are going to be and Therefore the roadmap which the government has laid for itself is We've opened our doors for investment Some of the sectors which had conventionally not been opened up have been opened up and by and large it's been a welcome move in India There are very few sectors now almost Insignificant which still remain closed Everything has been opened up Recently in the last few months we've taken the step of opening out insurance in a big way We've opened our defense sector in a big way. We've opened up railway infrastructure or Real estate sector now these were some of the sectors on which we had been conventionally conservative But now these all have been opened up for investment of having opened them up for investment the next stage is When both domestic and international investors come in How do we ease in our systems? so that Investing in India Itself becomes more attractive There had been a legitimate complaint that between the time when a investor takes a decision to invest and the actual launch of his project He has to run to dozens of offices There are many challenges before him and therefore the time spent in this itself Maybe a few years before we can actually start the process now. This is something which I would say is still work in progress we are trying to narrow down that period and Therefore, I've in fact in this year set up a new committee To look into the whole mechanism of how the whole institution of prior permissions can be replaced by a regulatory Mechanism where it's far easier to start your business just complying with the guidelines which have been stated in that area As far as our taxation laws are concerned There had been conventionally a lot of legacy issues It had been a fairly hostile system some people mentioned In the last few months, I'll be speaking on it separately at a function tomorrow So I'm not elaborating at this moment in detail as to the steps which we are taken to smoothen up the entire taxation system itself There are sectors which we've opened up in a big way our mining sector our coal sector and The auctions which we've held in these areas Have been a huge success The entire possibility of anybody calling a decision of the government questionable itself has been completely eliminated and Hence once these sectors and the manufacturing activity which results from these sectors coupled with our emphasis on infrastructure all this Over the next few years. We start seeing the result of all this activity in infrastructure and manufacturing I have not the least doubt that from where we consider today around eight percent growth Which we hope we are going to achieve this year The ability to march forward towards that double-digit growth over the next few years is going to be reasonably possible Our one of our very big challenges has been and that's still a contentious issue Has been the land law in India particularly the one which was Legislated in 2013. I have no hesitation in saying That the land law if it remains in the present shape is a hurdle to employment creation In fact one of their purposes and I think that's one of the key purposes The most important one in terms of using India's demography is One particular provision in the land law in the context of the subject that I would like to point out One of the areas where we are trying to ease in the acquisition process is What we call the creation of industrial corridors now unlike an industrial park or an industrial hub an Industrial corridor is a narrow corridor Which runs along a national highway which runs along a railway track Where you have industries on both sides of the road Now this is capable of providing employment to vast number of people in rural India We currently have the Delhi Mumbai corridor, which is being built. It's 1200 kilometers You have the Calcutta Amritsar same distance which is being built. So you will have townships, smart cities industries running across this whole corridor 300 million people in India are landless and When we talk in terms of using India's demography The urban people are capable of finding a job for themselves The landed presentry is capable of finding work for itself But it is those 300 million landless, which is almost close to a quarter of India's population For whom industrialization of the areas where they are staying in that's the rural areas And it is these narrow corridors which are capable of providing a big Opportunity in these particular areas and I see one of the biggest challenges of the land law Which we are trying to amend which is currently a Lot of issue in India would be this would be the net advantage of that land law if It could be passed in the coming days itself our program to have a 100 new smart cities in India now we've Seen the first experiment last week I had an opportunity To launch what is strictly India's first smart city It's also a special economic zone of financial sector hub in Gujarat in Gandhi Nagar and The financial model on which it has been built is where land and the right to build on that land We call it the fsi or the far in India itself is being used as a resource and that resource Entirely is the state's investment No more revenue from the state extekers has been required That's the financial model on which it has been built and it's been an excellent success the response to this has been Extremely good. It's something which is worth emulating our skill development program Has just started and I think it's the success of this program itself Which eventually can take us in the direction of Generating a huge workforce with a large potential for employment itself the weakest sections of society in India We've started a huge social security program. We call it the jana dhan Program where every Economically deprived person who had no access to a bank a Banking facility. He's been linked to today. We are in the process of cash transfer to his accounts Supported by a social security program itself Which the government has launched in this current budget, which is the cost of some questions if there's an opportunity I'll try to explain in detail the Indo-US partnership Gradually it's reaching a new height There's a huge amount of cooperation and for each of these programs We need a lot of investment both domestic and international and For each of these in the areas of skill development in the areas of education in the areas of infrastructure in the areas of Manufacturing it is here if the investment starts coming in I think the entire issue of Providing skills and jobs to this great workshop workforce in India would be reasonably possible. Thank you That is an impressive agenda of accomplishment so far and vision for what's coming up ahead And I think the goal here in the United States from those of us in this room and involved in the policy community Whether it's from government or business or other groups is to figure out What's the role that we can play because certainly India's growth is in our interest in so many ways So the minister's got opportunity to take a couple of questions here Please you know your name where you're from and keep it very brief I'm gonna be very aggressive on that point. We don't want speeches, but we would like to get a few questions in So, let me just start. I see the first hand right over here. We've got a microphone coming up behind you Thank you, sir. That was a very lucid and very Illuminating talk. I'm Pradeep Kapoor. I was ambassador of India in Cambodia when you visited in the previous government with watch by and I was there after ambassador of Indian Chile. I Was secretary to the government and now I'm professor at the University of Maryland so my question to you is What we feel from seeing the media in India is That a perception is being sought to be created That there are many shortcoming there are many problems with governance issues in India How is the government planning to tackle this very serious issue because half of the aspect of development takes place When there's a good economic sentiment So that is there and the perception globally of the government is very good So what are the steps that the guy in spite of all the great steps you have undertaken the government has undertaken in So many different social sectors. Yeah, I think yeah. Thank you. Thank you sir. Take the microphone. Yeah, perfect Thank you. I think India is a country where You'll have a lot of things happening at the same time and Therefore in a country of India's size is almost a continent with a very large population You can have Even trends indicated which are not encouraging you may hear some discordant voice somewhere But that's not mainstream India today in most parts of the country The central government certainly and I would say a very large number of states There is a huge huge change in priorities And I think there is a growing feeling that the current both domestic and international situation is conducive for India's growth for instance if you Asked an average Indian commentator To comment on how India is doing today The fact that we are this year the year which has just concluded our year ends on the 31st of March and We are likely to grow by seven seven and a half percent in that range So if you ask an average Indian commentator, he won't tell you that it's a great thing that has happened The the the feeling still is this is not our real potential There are still many many things which we can do as I just indicated and when the net impact of An improved manufacturing sector net impact of larger investments in infrastructure better social infrastructure Unleashing our entire potential Through mineral based industries something which we are trying to unleash now once all this is realized One of the important steps which I intend to conclude in the coming week weeks itself in the The next three weeks when the parliament session is on is the goods and services tax Now independent observers believe that that itself is capable of pushing up India's GDP anywhere between 1 to 2 percent now All this is quite capable of taking us close to What we thought we could never reach and today there is a realization. That's a realizable target Yeah, right there in the in the alley the aisle Thank You minister a Krishna Guha with Evercore partners I was particularly interested in your discussion on the importance of manufacturing as a source of job high quality job growth In India going forward now, of course historically small-scale reservations on the one hand and Restricted labor laws on the other have been seen as some of the disincentives for large-scale investments in Manufacturing in India could you comment a little bit on how your government intends to attack those problems going forward? you see the the whole institution of erstwhile reservations is now substantially diluted one of the reasons we have to keep our emphasis on Helping the small-scale entrepreneur Because considering the size of India and its population There's a very large section of self-employed who are involved in those trades businesses manufacturing a recent census showed That it's almost 5.77 cross which means If you translated into number of families it'll almost mean 20% of Indian families are involved in this self-employed business Which which which has no sources of External funding it's etc. We've launched one of the schemes a few days ago Which I'd announced in the budget called the mudra bank Where we are trying to fund this unfunded section and therefore this is a workforce which has to be involved now unless I can have structured medium and large-scale Manufacturing which involves each one of these there is no way I can Have any policy or the government can have any policy which hurts this interest which is self-employed Now having said this Amongst various reforms labor laws will remain a challenge Now a particular formulation has come about where I mentioned in the opening comments with regard to competitive federalism Now in some of the more progressive state governments Have started we we've made some amendments. I won't say they are very significant But some state governments are started asking for some very significant amendments Now earlier the central governments used to say no because it requires concurrence of the center Because it's otherwise clashing with the central law Now we were the policy decided that every state government which asked for an amendment to its labor laws To buy and large agree to that request now we've agreed to those requests So a new formulation in that is being worked out now the effect of this is going to be You'll probably have a sense of states which have more progressive labor regimes and Therefore as a part of cooperative federalism Those who don't reform will have to compete with them Okay, I think we have time for for one more so allow me to yeah I think back over in the side there gentlemen. Yeah, right on the other side of the row there Thank You minister you talked about one leg of the infrastructure stool being roadways for the industrial corridors What is your roadmap for investment in infrastructure for? Portable water and power to those industrial corridors You see as far as Power is concerned Last few months we've made important strides We made strides both In renewable energy Because our renewable energy program being a cleaner energy is a very large one and Therefore we've set a very important roadmap for that As far as other conventional energy is concerned the non-renewable which is coal based It has its own pitfalls, but currently there is no solution out of it because a large amount of India's potential Was based on on the coal based power itself Now availability of coal was a problem because that had been stalemated in India on account of the process of Allocations now that's something which has been resolved and therefore power availability over the next few years is going to hugely increase Water is still a challenge Water is a challenge More particularly even for agriculture and in fact one of the Areas where we could grow besides industry is also agriculture because States which have done well in terms of the irrigation programs which have domestically balanced it with the ecological considerations have Ported in Transported water from one part of the state to another connected different rivers etc. Are states which have done exceedingly well For instance one of the states in the central India. I Visited that state last week And I was pleasantly surprised Its agricultural growth has gone up, but the produce to 18 to 20 percent Because of transportation of water from one part of the state to the another now It is these kind of creative schemes which are being worked in several part If I have more resources at the center, which I think with increased growth rates my revenues are going to go up one of the areas on which In the next one or two years I Intend to make a concentrated investment in is this whole business of Transportation of water, which is going to help irrigation and perhaps will also eventually Help other areas where water would be required Finance Minister Jetley on behalf of the Wadwani foundation CSIS and our friends at Anand foundation want to say thank you for coming here I Think everyone is impressed by the progress we've made in the last 10 months since the new government came to power Earlier this morning I Made some remarks to the audience here About how impressed I was when I met Prime Minister Modi in September when he was in New York and Two of the topics we talked about one was the fact back to the issue of the demographic dividend India needs to create something in excess of 25 million new jobs over the next five years and the practical reality is That in the previous five to seven years, we only created 2.7 million net new jobs Though there were huge shifts in the unorganized sector between agriculture and construction now since There are many different ways in which one can create new jobs Certainly one of them is the kind of cooperation with the US that we have been talking about today and I think there's an opportunity here to double the FTI from the US to India Total FTI to India is 30 to 35 billion dollars a year right now Perhaps we can set a goal of 75 billion for five years from now and come up with specific industry by industry initiatives To drive that doubling of FTI because that will go a very long way towards Supporting make in India supporting smart cities supporting job creation in India and then on the Indian side, I think more could be done by way of Innovation and small businesses because that is ultimately the biggest growth driver in India We have as you said many millions of small businesses, but most of them are not innovative So other than the family, they don't hire too many other people to fill 25 million jobs We need hundreds of thousands of new entrepreneurs. We need a million or two million businesses adding five or ten employees each and When I was there in February our foundation has formed partnerships with four of the ministries in India And the signs are very encouraging So I want to thank you want to thank the Prime Minister. Just keep the momentum going speed it up And nothing would please all of us more than to see India's FTI double and 25 million jobs get created. Thank you In in closing I'd like to first thank the finance minister for being here with us today Despite his very busy schedule in Washington You if you heard what he has to say and it's clear the government has a clear agenda It's focused on getting the job done and in Mr. JT We have somebody who's got clarity of mind lucrative expression and is leading the attempt to get the economy on to double-digit growth We've been here from the morning. We've had many panelists many speakers I'd like to thank them all some of them present here. Mr. Panda the finance secretary was here And several speakers on the corporate sector and knowledge partners So I'd like to thank CSIs for organizing this Rick for all the efforts that you put in Mr. Adwani for your partnership in this and your leadership and To say thank you all for being here It's been a rich day, and I'm sure we all have takeaway thoughts that will stay with us. Thank you very much And we'll have a reception up on the veranda to follow too, so please join us for for reception back there