In­dia Inc Hopes Jait­ley Can Make it Busi­ness as Usual

Ajay Pi­ra­mal and Ash­win Dani are hope­ful that new FM will re­vive growth and drive the econ­omy

The Economic Times - - Companies - OUR BUREAU

In­dia Inc, bat­tered by ris­ing in­ter­est rates and pol­icy dead­lock, looks for­ward to an eas­ing of the pain of do­ing busi­ness and mea­sures to spur growth as Arun Jait­ley takes charge at North Block.

Jait­ley, they feel, faces the big­gest chal­lenge in putting the econ­omy back on track. “He is, how­ever, a no-non­sense leader, who will surely not only clean up the at­mos­phere, but also drive the sag­ging econ­omy,” said Ajay Pi­ra­mal, chair­man of the Pi­ra­mal Group. On Mon­day, Pi­ra­mal, Ku­mar Man­galam Birla and Mukesh Am­bani were among the busi­ness lead­ers who at­tended the high-pro­file swear­ing-in cer­e­mony of Naren­dra Modi. The prime min­is­ter and the fi­nance min­is­ter share a per­sonal rap­port with many busi­ness lead­ers. Ash­win Dani, vice-chair­man of In­dia’s largest home-grown paint com­pany Asian Paints, said the new fi­nance min­is­ter should give pri­or­ity to re­viv­ing growth in the man­u­fac­tur­ing sec­tor which will lead to an ex­plo­sion of jobs. “In­dia now needs more jobs. That can come only by re­viv­ing the man­u­fac­tur­ing sec­tor. We can also take a cue from the way South Korea has de­vel­oped its R&D,” Dani said. Dani, who was part of an in­dus­try del­e­ga­tion to Seoul with Jait­ley when he was com­merce min­is­ter in the Atal Bi­hari Va­j­payee govern­ment, said he should take steps to set up an R&D cen­tre for in­no­va­tion.

Cor­po­rate lead­ers feel that Jait­ley’s un­der­stand­ing of is­sues will help him solve crit­i­cal prob­lems. “His re­cent state­ment of bal­anc­ing in­fla­tion with ex­pen­di­ture is in­dica­tive of how tuned-in he is to the core is­sues that plague the econ­omy,” said GP Hin­duja, co-chair­man, Hin­duja Group World­wide.

In­vest­ment banker He­men­dra Kothari said the most im­por­tant thing is to cre­ate a high sense of mo­ti­va­tion for lo­cal as well as for­eign in­vestors. “I am sure Jait­ley with his proac­tive ap­proach will in­still con­fi­dence and spur mo­ti­va­tion,” he said.

In­dia Inc wants the new FM to sim­plify taxes and ease the pain of do­ing busi­ness in In­dia. In­dia to­day holds the rep­u­ta­tion for hav­ing a most dif­fi­cult tax regime. The In­dian govern­ment’s tax dis­putes with a string of com­pa­nies, in­clud­ing Voda­fone and Cairn En­ergy, have de­terred in­vestors.

“His pri­or­i­ties will be demon­strat­ing fair­ness to all tax pay­ers, do­mes­tic and for­eign, sim­pli­fi­ca­tion, re­al­lo­ca­tion of re­sources to en­sure end im­pact and an ex­pan­sion of the tax base. I ex­pect GST (goods and ser­vices tax) and DTC (di­rect taxes code) in a mod­i­fied form to be in place in a two-year time frame. No doubt the next budget will be a mo­men­tous pol­icy state­ment,” said Shailesh Harib­hakti, chair­man, De­sai, Harib­hakti Group — a Mum­bai-based con­sul­tancy firm. San­jay Nayar, CEO of KKR In­dia, said: “A res­o­lu­tion of some of the long-pend­ing tax is­sues would be an added stim­u­lant for FDI flows.” In­dian com­pa­nies said they face ma­jor hur­dles in the form of dra­co­nian pro­vi­sions in the new Com­pa­nies Act. In­dus­try lead­ers feel that the fi­nance min­is­ter him­self han­dling the cor­po­rate af­fairs min­istry would make a lot of dif­fer­ence. “Some of the dif­fi­cult rules in the Com­pa­nies Act may have to be amended,” said Nimesh Kam­pani, chair­man of JM Fi­nan­cial.

The new Com­pa­nies Act has put pro­mot­ers of mid-size com­pa­nies in a tough po­si­tion, ac­cord­ing to some. “I am sure the new FM, with his pro­found un­der­stand­ing of is­sues con­nected to busi­ness, will try to get rid of all reg­u­la­tory has­sles. Things like the new Com­pa­nies Act are def­i­nitely sap­ping the en­ergy of mid­size pro­mot­ers,” said Vi­mal Bhan­dari, MD & CEO of Indo Star Cap­i­tal Fi­nance.

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