Logistics cost in India will come down to match global average in the next two years, according to Deepak Bagla, Managing Director & CEO, Invest India, a central government agency dedicated to attracting foreign investments.

Logistics cost in India is in the range of 18-20 per cent. Currently a truck going from Delhi to Kolkata will take between 13-16 days. “But, with the kind of road projects and infrastructure development being done, the trucks will be able to move in four days from Delhi to Kolkata by 2019, when our logistics cost will meet the global average of 10-12 per cent. I am not referring to GST,” he told the 181st annual general meeting of the Madras Chamber of Commerce and Industry.

The drop in logistics cost will make operating in India more competitive and attract manufacturing investments into India. “This is the objective of the Make in India exercise, under which India will be turned into an industrial hub,” he claimed.

Bagla said Make in India is a big business plan though there were different views about it. “When the government chose the 25 sectors, they were chosen on the basis of investments that were already coming in,” he pointed out.

Presenting a bullish view on the country’s future growth, Bagla claimed India is not just the number of one country for FDI globally, but also number one country for any global corporate entity wanting to open an R&D centre outside its home country.

Presenting a view on the business sentiments, TT Srinivasaraghavan, Managing Director, Sundaram Finance, felt that though everything looked all right, effects of those were not seen at the ground level.

“Somewhere all the feel good things don’t seem to be translating on the ground. I have started to believe that there is a statistical reality and a real world reality,” he added.

He highlighted the urgent need to create jobs for the graduates who enter job market every year in order to prevent any social consequences.

“If we don’t do anything quickly in generating jobs, this demographic dividend could very easily turn into a demographic time bomb,” cautioned Srinivasaraghavan. In this context, skill development, MSME financing, vocational training would assume importance, he felt. He highlighted the growing cost of compliance for companies and said the regulatory overhang was something that needed to be debated.

Arguing that not all of corporate India was corrupt or fraudulent or evaded taxes, he wanted the government to acknowledge good corporate citizens and reward them.

He suggested measures such as a two per cent tax rebate for companies that have full compliance and zero litigation. “At this juncture, there is no incentive to be a good corporate citizen,” he said.