Industry Chambers Ready with their Economic Agenda
Call for quick action to curtail inflation, pass GST, ease land acquisition hurdles
It may take another week before a BJP-led government takes over, but industry chambers want it to hit the ground running, to lift the economy out of a slowdown with quick action to ease land acquisition hurdles, curtail inflation and clear passage for GST, among others.
“A huge thrust has to be on implementation since that yields results most visibly,” said CII president Ajay Shriram. “Then there are irritants like the Land Acquisition Act and the new Companies Act, which need comprehensive overhaul to make them practical in the context of realities today,” he added.
Ficci has recommended a 12point agenda for the new government and emphasised the need to deal with food inflation and roll out of Goods and Services Tax by 2015.
“…the interim weeks must be liberally used by our leadership to project its vision and set a progressive tone and direction. We also hope to see measures on inflation mitigation and restoring confidence besides road maps on job creation and national competitiveness,” said president Ficci Sidharth Birla.
Lower inflation will give room to RBI to cut rates and facilitate economic revival. Inflation based on the Wholesale Price Index fell to a lower-than-expected 5.2% in April from 5.7% in the month before, making a case for another status quo in the June 3 policy review.
Meanwhile, global ratings agency Moody’s has given a credit positive to the ‘decisive election result’ declared on Friday, which gave a clear majority to BJP with 282 seats.
Markets have responded very positively to the BJP’s thumping victory under the leadership of Narendra Modi, who has promised to focus on growth. The rupee on Monday appreciated to an 11-month high of 58.59 a dollar, up 20 paise from its previous close while BSE Sensex closed 1% higher at 24,363.05.
A CII-KPMG report on ‘Ease of Doing Business in India’ released on Monday identified key areas for reform which will enable doing business in India, including setting up of business, land acquisition, taxation and contract enforcement.
The report pointed out that it takes an average of 14 months to acquire land and recommended setting up of large designated industrial zones with pre-clearances along with single-window registration and mutation process.
Assocham president Rana Kapoor said that while the industry had strong reservation on the new Land Acquisition Act, the immediate solution lied in the Centre and states teaming up and creating land banks that should be then allotted to the industry for manufacturing and infrastructure facilities.
“As long as the process is transparent and stakeholders like farmers are taken on board, there is no reason things should stay muddled,” he said.
Kapoor said the full-fledged budget next month should send a strong message that the tax regime would be clear cut, non-discretionary to different interpretations and under no circumstances would be retrospective.
Ficci has suggested that the new government may announce 2-3 mega infrastructure projects such as highspeed passenger train corridors, pucca roads to each village, a PPP advisory unit to revive stalled projects and privatisation of ports.
Future course for new govt