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Opening Remarks by Finance Minister Mr. Pranab Mukherjee at the INDIA-US CEOs Forum Meeting

Secretary Clinton,

Mr. David Cote and Mr. Ratan Tata, Co-Chairs of the India-US CEOs Forum, distinguished representatives of Government and members of the India-US CEOs Forum, it is indeed a pleasure to be here today.

2. Many of you are old friends with whom we have been working with significant success over the years. I value your engagement and support.

3. I am particularly happy to see how the India-US CEOs Forum has established itself as a bridge between the private sectors and Governments of India and the USA. With your leadership and vision, you have created synergies that are invaluable. The initiative to take this strong economic partnership to a new level of innovation and sustained growth is indeed welcome.

4. My colleagues and I laud your efforts and our very presence today specifically for this meeting indicates our commitment and support.

Friends,

5. When I was growing up in India, we used the word ‘captain’ to refer to someone who was in charge of navigating a ship through stormy seas. So when I first heard the term ‘captains of industry’, I was a little puzzled.

6. But having been the Finance Minister of India, I realize that the global economy can be as stormy as any sea. In fact very often it feels like a Tsunami. Anybody who tries to navigate his or her corporation through the global economy is, therefore, rightly called a captain.

7. For this reason I greatly appreciate the work that you have been doing. I hope you will also appreciate a little the work that we in the Indian government have been doing in these turbulent times.

8. As you, being captains of industry, know, and I, as captain of a national economy, know, the world is going through a very difficult phase. The world has recently begun to come out of the great recession. What started as a sub-prime crisis in 2007-2008, became a financial crisis that affected banks and private corporations. And then it spread to the real economy. Governments around the world rallied to protect the banks and corporations. Unfortunately, now some of the governments themselves seem to have got infected. I am referring to the difficult sovereign debt situation that our friends in Europe are facing today.

9. Economists used to tell us last year that the global economy will make a V-shaped recovery. That is, it will turnaround very quickly. Then, I was told that it will be U-shaped recovery, meaning that it will stay at the bottom a little longer before recovering. Recently, with the risk of a new crisis in Europe, experts are saying that it may be a W-shaped recovery.

10. Frankly, I am beginning to feel that for every alphabet in the English language there is a theory of recovery. What so many competing theories of recovery mean, is, that we really do not know the answer. There is uncertainty concerning which way the global economy will go. We – be it the corporations or governments – have to be careful and vigilant.

Friends,

11. Fortunately, for India, the recovery seems to be on a surer-footing. I used the word “fortunately” deliberately. It is only a foolish person who will try to take credit for everything. The Indian economy has done exceedingly well in these difficult times through a combination of careful policymaking, dynamic industrial leadership and luck. Last quarter our GDP grew at 8.6% and this year my Ministry has predicated a growth rate of 8.5%.

12. I notice that the IMF has recently challenged our prediction. For once, however, I am not going to argue with the IMF. The IMF believes that the Indian economy will grow by 8.8%!

13. There are several reasons why I am optimistic about India’s long-run growth prospect. For the first time it appears entirely within the realm of the possible that India will break into double-digit growth within the next five years.

14. Standard economic theory teaches us that high savings and investment rates are essential for a nation to grow fast. We in India used to watch with envy how the East Asian super-performers saved and invested over 30% of their GDP. What many observers do not know is that, from 2003, India has broken into this high-growth circle. We now save and invest around 34% of our GDP. And that data we have received over the last couple of months suggest that this is still rising.

15. Our growth is coming not just from government action but from a variety of sectors and stakeholders from all over the economy, including our dynamic private corporate sector. Many of the leaders of this sector are here with us today. To me, this multiple source growth is a sign of robustness.

16. A significant part of India’s growth impulse is from our rural sector which has been prioritized in our developmental plans for inclusive growth. Focus is on innovation with a broader outreach at the grassroots level and engaging medium sized companies in the US and India in the development process.

17. At this opportune moment India offers investment opportunities in excess of US$ 850 billion over the next five years. In the infrastructure sector, we envisage investment at US$ 1 trillion between 2012-13 and 2016-17, with a potential funding gap of 25-30% bridged through innovative modes of financing.

18. We in India are also working to make our government more efficient, transparent, and in step with the modern world. As you no doubt know, we are in the process of a major reform of our direct and indirect tax systems. Our draft Direct Tax Code is now available on the web. We have sought comments and suggestions from all stake-holders. I have also asked my Ministry to prepare an annual report on India’s public debt, which will be available to all. I have made a commitment to bring down the public debt as percentage of GDP from the current level of around 75% to below 68% in three years. India’s fiscal health is good now and this new target will make it even better. It will also make more room for private sector borrowing and investment. Our ultimate aim is to make India a vibrant economy that attracts global capital and trade. In fulfilling this objective all of you have a role to play. The relationship with the US is one of the most important bilateral relationships for India today. As India pursues its developmental goals, we would like to work with the US – especially where our priorities converge, to realize outcomes that are to the mutual benefit of our peoples. We have a unique advantage which is the existence of strongest possible people-to-people linkages that any bilateral strategic partnership could wish for. We have, in our Strategic Dialogue, innovation as the principle that should guide our work ahead.

19. I am sure that the dynamism and energy of our private sectors and the public-private partnerships that we envision will help to take our cooperation and achievement to unprecedented heights.

20. The trust that we have built through our 100% compliance record in the safeguarding of imported technology should help us to increase our bilateral high technology trade. I am aware that this is presently under discussion and I would only underline that India has a record of being a trusted a customer. I am sure that our Governments should be able to work together to create the conditions for a win-win situation in advance technology trade between our two countries.

21. My counterpart, Secretary Geithner and I launched the Financial and Economic Partnership when he visited Delhi in April this year, with the objective of strengthening engagement in economic, financial and investment related issues. We are currently negotiating a Bilateral Investment Treaty and are committed to take further initiatives that will contribute to creating a more conducive environment for investment flows.

22. Our economic Ministries have taken steps to gradually liberalize policies on which you will hear from my colleagues this afternoon.

Friends,

23. I am aware that as captains of industry you will have a major focus on profits. I am sure you are equally aware that, as a politician, I have to keep a watch on votes. But, at the same time, all of us must have ambitions that go beyond these. Our ultimate aim has to be the well-being of human beings. We have to strive for inclusiveness not only in our individual nations and corporations but in the world and across nations. We live today in a world where all our fates are tied together. For that reason, if for no other, we have to strive together to create a better world.

24. Our ambitions must go beyond the economy. India’s founding fathers had a vision very similar to what the founding fathers of the United States had. India is today a secular, democratic nation and, as a political leader of India, I am proud of that.

25. To hold on to these ideals and to run to a growing robust economy means having to face lots of challenges. We must collectively rise to those challenges.

26. I know that this sounds as if I am trying to reach for the stars. I want to assure you that that is exactly what I am doing. Together we must try to reach for the stars.