GCCs have far-reaching impact on economic growth, says Sitharaman

Visakhapatnam, Sep 17 Global Capability Centres (GCCs) have a far-reaching impact on economic growth, competitiveness and human capital development and India’s GCC story is a transformational journey, Union Finance Minister Nirmala Sitharaman said on Wednesday.

Addressing the GCC Summit of the Confederation of Indian Industry (CII) here, Sitharaman noted that GCCs are innovation hubs, driving R&D, generating intellectual property and patents and enabling sustainable growth for global enterprises.

The Finance Minister said before the Union Budget of July 2024, she was told that 50 per cent of GCCs of the world are to be in India and for the rest, which are outside India, 50 per cent of them are run by mostly Indians. "Now, after almost two years, GCCs have acquired an Indian flavour and that's been going on with the same expectation and speed," she said.

She was of the view that state governments are playing a critical role in deepening India’s GCC advantage and shaping an enabling policy environment. In order to maximise the impact, she called for aligning national and state-level policies and adapting policy instruments to ensure that each state builds on its unique comparative advantage.

The Finance Minister suggested building livability and infrastructure ecosystems that allow Tier-2 and Tier-3 cities to emerge as centres of excellence that can attract global talent, encourage corporate reinvestment and host high-value innovation and service delivery, offering credible alternatives to Tier-1 metros.

"The Central government is committed to partnering with states in this endeavour, by building capacity and addressing ecosystem needs," she said and mentioned that the 2025 Budget proposed a national framework to guide states in promoting GCCs in emerging Tier-II cities.

She stated that the release of the Model State GCC Framework provides a clear roadmap for states to scale up their efforts, attract investment and build resilient ecosystems. "By working together - Centre, states, industry associations like CII and global companies - we can ensure that India’s GCC growth is both broad-based and future-ready. This will not only consolidate India’s leadership in the GCC landscape, but also create new opportunities for innovation, job creation and inclusive regional development, eventually contributing to the vision of Viksit Bharat by 2047," she said.

Sitharaman told the Summit that a massive push has been undertaken to address infrastructure and logistics bottlenecks. She pointed out that capital investment has increased from 1.7 per cent of GDP in FY2013-14 to 3.2 per cent in FY2024-25, with effective capital expenditure at 4.1 per cent of GDP.

"Over the last 11 years, 88 airports have been operationalised, 31,000 km of new rail tracks laid, metro networks expanded over fourfold, port capacity doubled, and the National Highway network has been extended by 60 per cent. Complementing these efforts, the Centre, under the Scheme for Special Assistance to States for Capital Investment (SASCI), has sanctioned over Rs 3.6 lakh crore as 50-year interest-free loans to states, and incentivised increased capex, resulting in 22 states recording more than 10 per cent growth in capital expenditure from their own resources," she added.

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