What are the key policy takeaways for India from Davos?

‘Cooperation in a Fragmented World’ was the theme of the 53rd annual meeting, in which 2,700 leaders from 130 countries, including 52 heads of state/government, participated.

India remains a bright spot amid global geo-economics and geopolitical crises, said Klaus Schwab, World Economic Forum’s (WEF) Founder and Executive Chairman, as the country took centre stage at the annual economic jamboree that is being held during the difficult times of war, high inflation and recessionary outlook.

“I commend the country's decisive action on the climate case for renewables, its contribution to the global healthcare ecosystem, the focus on an economic model for women-led development, and its leadership on digital public infrastructure," Schwab said, as the meeting winded down on January 20.

India was the most visible country at WEF, with many industrialists, politicians from the states and the Centre participating in various discussions. In attendance at the event were Union ministers including Ashwini Vaishnav, Smriti Irani, R K Singh and Mansukh Mandaviya.

Many prominent business leaders such as N Chandrasekaran, Kumar Mangalam Birla, Adar Poonawalla, Sajjan Jindal, Sunil Mittal, Nadir Godrej, Rajan Mittal and Sanjiv Bajaj were also present.

In attendance were 1,500 leaders registered across 700 organisations, including over 600 of the world's top CEOs with top-level representation from sectors, such as financial services, energy, materials and infrastructure, and information and communication technologies.

‘Cooperation in a Fragmented World’ was the theme of the 53rd annual meeting, in which 2,700 leaders from 130 countries, including 52 heads of state/government, participated.

Speaking at a panel discussion, Union Railways, Communication and IT Minister Ashwini Vaishnav said that the government has been focusing on capital expenditure to further boost the growth and employment prospects. He emphasised the need for attracting a large number of supply-chain participants while using local research and development capabilities.

On Railways, Vaishnav said the capex was $23 billion last year, which is now expected to be in the order of $26 billion. "Same goes with highways and power transmission. This capex is helping employment, as around 1.5 million people are being added to formal jobs every month," the minister noted.

Vaishnav, who was a part of the panel discussing ‘India’s road to $10 trillion economy’ said the key factors that will make difference to ensure India reaches its target are ensuring there is a consistent 6-8 percent growth rate for a complete decade; energy transition and digital transformation.

The minister said these factors coupled with moderate inflation can ensure India reaches its target.

Union Minister for Power and the Ministry of New and Renewable Energy RK Singh said India is the only major economy whose energy transition is consistent with a sub-2-degree rise in global temperature. He said India has achieved its Nationally Determined Contributions (NDCs) nine years in advance. “We had said that we’ll have 40 percent of our capacity coming from non-fossils by 2030, and we achieved that in 2021.”

Commenting on reducing India’s emission intensity of the country’s Gross Domestic Product (GDP), which is a measure of the amount of greenhouse gas emitted per unit of economic activity, Singh said India has already reduced the intensity by 30 percent.

Speaking exclusively with Moneycontrol, RK Singh said India is emerging as one of the biggest manufacturing centres for green hydrogen and green ammonia. He said, “It will be on a scale which no other country will be able to match. Already we have manufacturing plants for 32 million tonne of green ammonia.” Singh said many Indian companies have already tied up orders in Germany and Japan because India offers it at a very competitive price, adding that the country has become an exporter of solar modules from being an importer at one point in time.

Speaking about the Electricity Amendment Bill, Singh said it is at present being considered by a parliamentary standing committee, and hoped that it will be passed after the committee completes its hearings.

Power minister RK Singh said he was optimistic that the state-run power distribution companies (Discoms) will be able to pay off the bulk of their outstanding dues by FY24 with support from the power ministry’s latest scheme. The scheme was introduced in May 2022, to help clear dues worth more than Rs 1.1 lakh crore.

On the progress of the scheme, Singh said, “(The scheme) is not only working, it is working very well.” The discoms have reduced outstanding dues by Rs 30,000 crore to Rs 35,000 crore.

The country’s electricity demand shot up to all-time highs in the summer of 2022, touching 211.856 gigawatt (GW) on June 10. This increase in demand sent the entire power value chain into a tizzy, with payment delays emerging as a critical issue. Following this, in May 2022, the power ministry proposed a scheme to allow discoms flexibility in paying off their pending dues to generation companies.

The scheme proposed staggered payment in up to 48 instalments. The liquidity breather for discoms involved a one-time relaxation and a freeze on the outstanding amount, including principal and late payment surcharge (LPSC). The freeze was to be applicable from the date of notification of the scheme, with no further LPSC to be imposed on the outstanding amount

Parameswaran Iyer, CEO of the National Institution for Transforming India (NITI) Aayog, highlighted the need to build a vulnerability index. The index is a measure of the exposure of the population to environmental hazards. Iyer said India is focusing on building resilient infrastructure and has started identifying the most vulnerable areas, cities, coastal areas, food and agriculture, and infrastructure so that it can prioritise areas for adaptation.

Speaking exclusively with Moneycontrol, Iyer said that Micro, Small and Medium Enterprises (MSME) and the agricultural sector will once more be prioritised in the Union Budget 2023.

Iyer said that the Union government has undertaken several structural reforms in the last few years such as the Insolvency and Bankruptcy Code (IBC), Production-Linked Incentive (PLI) scheme, and Goods and Services Tax (GST) – which will keep the Indian economy in good stead.

Union Minority Affairs Minister Smriti Irani said that the government has re-strategised the development plans over the past eight years to support and empower the vulnerable section of the population. She highlighted that social security is being looked at as a social investment. Irani said the doorstep delivery of ration to 80 crore people addresses their consumption needs and assists their purchasing power.

Irani, who is also the Minister of Women and Child Development, said India won't have a 'one-size-fits-all solution' but each issue has to be dealt with separately.

She said, "Do we reduce women to only consumption of technology? Or do we want to support them to become leaders of technological institutions or enterprises? The G20 presidency gives us a unique opportunity to speak about our experiences, speak about our commitment.”

Expressing concern over the low female participation in the country’s formal workforce, she asked India Inc to increase women's participation in the workforce while underlining that the industry needs to step up in the wake of various women-friendly laws announced by the government.

Stating that gender discrimination in corporate in India is still a concern and citing the government's Maternity Benefit Amendment Act, which has increased the duration of leaves from 12 weeks to 26 weeks for female employees, Irani questioned whether it is not mandatory for all companies to offer maternity advantages to women employees.

Reiterating that measures have been taken for the welfare of the people and unorganised labour force including women, who form a major part of agricultural and construction segments, Irani said the government has implemented insurance, health, pension, and food security schemes from time to time to bring informal workers into the formal workforce.

Union Health Minister, Dr Mansukh Mandaviya said that digitisation is giving a big boost to the healthcare and medical education sectors in India while also providing a much-needed safeguard against corruption. The minister emphasised that there is no risk of data theft in the digitisation of medical records of Indian citizens.

He also said that technology and artificial intelligence are helping in a big way in the medical education sector with all colleges and institutions being linked to the National Medical Council.

Access to records is available only after consent of the patient through a single-use OTP and the data cannot be stored locally or accessed by any hospital, doctor or laboratory after the patient has left, he said.

The minister said the county is working towards growing its health infrastructure and has initiated multiple schemes to strengthen health systems and improve health service delivery with a focus on quality, accessibility, and affordability of services.

Mandaviya highlighted that India has always envisioned healthcare as a service and cited examples such as PM Jan Aarogya Yojana covering approximately 500 million people and establishing 150,000 health and wellness centres across the country.

With India assuming the presidency of the G20 group of nations, one can expect announcements to be made in line with what was discussed at Davos. The Union Budget, which would be announced on February 1, is also a platform that the government uses to announce its policies.