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'Eli' Goldratt Volume 20 No. 7 July 2011 Contents 06 COVER STORY US - India Economic and Financial Partnership The high level interactions at the second annual meeting of the US - India Economic and Financial Partnership event underlined the deepening relationship between the two nations and the implications therein for the global economic order. 12 SPOTLIGHT CII CEOs Delegation to the UK With a focus on ‘Partnerships in Manufacturing,’ the CII delegation met with business leaders, political leaders, academia and think tanks in the UK to outline the next steps towards greater partnerships. 17 TRIBUTE Remembering Dr. Eliyahu ‘Eli’ Goldratt Vignettes from CII’s long and fruitful relationship with the Management Guru, who recently passed away. 30 CORPORATE INDIA 1st National M&A Summit The M&A Summit discussed the impact of the changing regulatory landscape while learning from India’s largest acquisitions for maximum value creation. PLUS All our regular features We welcome your feedback and suggestions. Do write to us at [email protected] Edited, printed and published by Chandrajit Banerjee, Director General, CII, on behalf of Confederation of Indian Industry from The Mantosh Sondhi Centre, 23, Institutional Area, Lodi Road, New Delhi-110003 Tel, 91-11-24629994-7 Fax, 91-11-24626149 Email, [email protected] Website, www.cii.in Printed at Lustra Print Process. B- 249 Naraina Industrial Area, Phase 1, New Delhi - 110 028 Registration No. 34541/79 JOURNAL OF THE COnfederatiON OF INDIAN INDUSTRY 2 | July 2011 Communiqué cover story India and the world US - India Economic and Financial Partnership Focus on Next Generation of Economic Reforms in India Pranab Mukherjee, Finance Minister of India, greeting Timothy F. Geithner, US Secretary of Treasury, as Meera Shankar, The high level interactions Ambassador of India to USA, looks on THE transformation OF Indo – US relations at the second annual over recent decades today encompasses almost all areas of international co-operation. Today’s mature meeting of the US - India and multi-faceted relationship encompasses a range of issues – from geo-political security and scientific Economic and Financial and technological co-operation to economic and financial partnerships. It is a ‘strategic partnership’ that underlines the need for mutual dependence and co- Partnership event operation between two large democracies in the current globalized political set up. Not surprisingly, the strong underlined the deepening ties and the broad-based engagement between the two countries prompted President Obama to deem the relationship between Indo-US relationship as one of the ‘defining partnerships of the 21st century.’ the two nations and the Mr. Pranab Mukherjee, Finance Minister of India, and Mr. Timothy F. Geithner, US Secretary of Treasury, implications therein for the launched the US-India Economic and Financial Partnership in April 2010 with the objective of strengthening bilateral engagement and understanding global economic order on the macroeconomic arena, financial sector and infrastructure-related issues. 6 | July 2011 Communiqué cover story Pranab Mukherjee with Chandrajit Banerjee, Director General, CII (left) and Timothy F. Geithner The second annual meeting of the US-India Economic and economic reform, but also true for India as well.” and Financial Partnership event, jointly organized by CII He said India today is reaping the benefits of the path and the Brookings Institution in Washington DC, USA, breaking reforms set in motion in the 1990s. “But I on 26 -27 June, continued the financial and economic think India is at a point now where the future growth dialogue between the two countries. The high level would depend on the success of next wave of reforms, interactions underlined the deepening relationship not just in the financial sector but also including the between the two nations and the implications therein financial sector. I think the Indian economy has outgrown for the global economic order. the financial system and it has got a huge need for The conference, organized as a precursor to the infrastructure financing, capital financing for running second round of US-India financial bilateral talks, business. The success of the Indian economy would began with opening remarks by Ms. Meera Shankar, depend on the substantial expansion on the success of Indian Ambassador to the US, and Ms. Lael Brainard, the next wave of financial reforms. Of course, we hope Under Secretary for International Affairs, US Department to be part of that,” Mr Geithner said. of the Treasury. The high point of the event was a Mr. Geithner clarified that growth in India would be moderated discussion featuring Mr. Pranab Mukherjee beneficial to the United States too and that the US and Mr.Timothy Geithner. does not perceive it as a threat in any way; in fact, high Panel discussions through the day-long conference growth and domestic demand in India would only imply featured prominent Indian and US regulators and finance an expanding market for US exports, he said. officials, academics from think tanks and research Mr Pranab Mukherjee declared that the Government of institutes as well as corporate leaders from India and India is committed to undertake the ‘constant exercise’ the US. The topics encompassed the economic and of ushering in the necessary reforms in financial and financial landscape in India and the US, the prospects of infrastructure sectors and in taxation. As a result, sustainable economic growth in the context of inflation and policy makers in India have heralded reforms in the key policy choices, new models for infrastructure markets mutual funds market, insurance sector, banking sectors, and lessons in deepening access to capital markets. pension, etc. Other necessary legislations too are under the serious consideration of the legislature, he said. Tremendous Growth Potential US – India relations hold tremendous potential. We Trade Relations are just at the starting phase of unlocking this huge Trade Relations, a key parameter of Indo-US economic potential – economic and financial, observed Mr Timothy ties, hold unlimited possibilities, observed Mr Chandrajit Geithner. Banerjee, Director General, CII. India is really featuring Indicating the need for heralding the next generation of high in the US Administration’s goals of doubling US economic reforms in India, Mr Geithner said “I think, exports by 2015. At the same time, India has the aspiration from our perspective, the key thing is the outlook for of doubling its exports by 2015. Needless to say, India economic reform. This is true in the United States – fiscal is also looking at the US in this regard, he said. Communiqué July 2011 | 7 cover story Growth Trajectory The economic intelligentsia who attended the event in Washington highlighted India’s impressive growth trajectory. Dr Kaushik Basu, Chief Economic Advisor, Government of India, brought home the point that on the back of sound economic fundamentals and game-changing reforms, India’s medium and long term growth outlook is robust and would easily stand at above 8%. He stressed the need for sustaining the growth momentum from the perspective of employment generation, pointing out that a 1% increase in GDP growth would create one million jobs. Dr. Basu noted that both India and the US share fundamental aspirations in terms of democracy, a vibrant media and secularism, which could translate into mutual economic benefits. On similar lines, Dr Subir Gokarn, Deputy Governor, Reserve Bank of India, presented the RBI projection for growth during 2011-12 at 8 per cent. Conceding the possibility of a drop in the growth momentum in R Gopalan, Secretary, Economic Affairs, India the short run on account of supply side pressures, he, Dr Kaushik Basu, however, affirmed that long term growth prospects would Chief Economic Advisor, India be robust if inflation was managed efficiently. Infrastructure Financing and Investment Opportunities Mr R Gopalan, Secretary, Economic Affairs, Ministry of Finance, India, observed that India’s infrastructure financing requirements in the next five years and the up-coming manufacturing policy would facilitate enormous investment opportunities for global investors to the extent of more than US $ 1 trillion. The National S Gopalakrishnan, Vice President, CII, Manufacturing Policy is tuned to create national and President & CEO, investment and manufacturing zones with world class Infosys Technologies Dr Subir Gokarn, Deputy Governor, infrastructure that would encourage mega investments Reserve Bank of India while there is a sustained and continuous policy churn to resolve impediments in land acquisition, environmental clearances and other clearances, he said. Deepening the Capital Markets Mr U K Sinha, Chairman, Securities and Exchange Board of India (SEBI) assured that deepening the capital markets and improving the access to them for financing growth is high on the regulators’ agenda. He informed that efforts are being made towards U K Sinha, simplification of products and customer convenience Chairman, Securities & so as to improve the reach of capital market products Exchange Board of India Lael Brainard, Under Secretary for across the length and breadth of India, and particularly International Affairs, US in rural areas. Dept. of the Treasury 8 | July 2011 Communiqué cover story Key Speakers Speakers at the conference from the US Dept of the Treasury included Mr. Charles Collyns, Assistant Secretary for International Finance; Mr. Barry Gray, Senior Advisor, Office of Technical
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