Address of Shri. Rajeev Chandrasekhar, MP & President- FICCI Interactive Meet with Finance Minister 5th March, 2008 – New Delhi

Hon’ble Finance Minister, Senior officers of the Finance Ministry, Ladies and Gentlemen:

It is with pleasure that we welcome our Finance Minister to this interaction with FICCI and I thank him for taking the time for this.

Sir, much has been written and said about the budget thus far – including at the Post budget interactive session on the 3rd. The dust has settled in a sense and FICCI and its members look forward to discussing some real issues and concerns with you.

You have been candid and we appreciate that candour – in saying that this budget is for the rural Indian and the farmer. I can speak for FICCI and its members and say emphatically that we wholeheartedly support this push towards a new economic framework for inclusive growth and so most of us and indeed most of the country were looking forward to hearing about the Governments new inclusive growth oriented budget. There are clearly many things in the budget and this architecture - that deserve appreciation – the never seen before investments in education capacity building, the spur in the consumption economy through personal tax exemptions, significantly increased investments in Health, Rural infrastructure, Irrigation, first time investments in skill development and climate change.

Given this acknowledged background of being a rural/Farmer and Aam Admi budget, the private investing sector seeks little except an assurance that this budget has everything required to maintain the growth momentum that has made India a trillion dollar economy – consistent with statements made by both you and the Honble Prime Minister in recent months.

The Prime Minister and you have both recognized the possible impact of these global clouds on our growth. This along with the sharp slowdown in the manufacturing growth – based on data from CSO for period of April – December make the biggest concern that FICCI members share almost across the board - one about the certainty of this growth.

You have taken some important measures in the budget like reduction of Excise duties and keeping customs duties unchanged. Both of which should theoretically along with the expected consumption economy growth be enough to revive the Manufacturing sector. We believe what is also needed is a lower interest rate regime by either allowing more access to ECBs (which in turn would give a blended lower rate) or simpler a lower rupee regime which is logical given the global low interest rate regime prevailing currently. The argument of inflation being driven by these low interest rates are in our humble opinion overstated especially in the face of evidence showing slowdown and accumulation of inventories and knowing as we know that in our country it is primary products and food shortages that are driving inflation predominantly.

The industry recognizes with appreciation your categorical assurance at the Post budget session that your ministry will keep an eye on progress of growth and industry and will take steps whenever necessary to ensure that growth does not stall. However realistically we must also recognize that it is difficult to trigger growth on the granularity of a quarter or six monthly period, and that is why we think its important to get the budget right vis a vis growth.

I have already at the meeting on the 3rd outlined, some of the early suggestions from FICCI and its members aimed at mitigating any growth risks. Today after your speech, our members will address directly to you some of their concerns/queries/suggestions all aimed at simply making sure that this years growth momentum is maintained. We look forward to your positive responses to these questions in the time allotted to Q&As.

On behalf of FICCI, I again welcome you and your team to this interaction on the budget.

Thank you.