‘Re­duce cor­po­rate tax rate to 20%, re­move ex­emp­tions’

DNA (Daily News & Analysis) Mumbai Edition - - FRONT PAGE - Zee Me­dia News­room

The gov­ern­ment should re­duce the taxes on equities in or­der to spur pri­vate in­vest­ment, says Vikram Kir­loskar, pres­i­dent, Con­fed­er­a­tion of In­dian In­dus­try and vice chair­man, Toy­ota Kir­loskar Mo­tor. In an in­ter­view with Swati Khan­del­wal, Kir­loskar said the end of trust deficit is needed to boost gross do­mes­tic prod­uct (GDP) growth.

Tell us about the auto sec­tor’s ex­pec­ta­tion from the Bud­get?

In­vest­ing in equities is get­ting more ex­pen­sive. I would re­quest the gov­ern­ment that it should re­duce or re­move three-four taxes that are levied on equities as it will give a boost to pri­vate in­vest­ment and bring ag­gres­sion among peo­ple for in­vest­ment. The sec­ond thing is con­sump­tion, a seg­ment that is fac­ing is­sues of liq­uid­ity and cost of liq­uid­ity. At the same time, a banker and my col­league Uday Ko­tak says that liq­uid­ity is avail­able in the mar­ket. But the prob­lem is re­lated to the cost of liq­uid­ity and we have to find ways to re­duce it. So a reduction of re­tail fi­nance cost will give a boost to con­sump­tion as well.

Ru­ral de­mand has weak­ened in the last six months.

What steps should the gov­ern­ment take to im­prove it? Do you have any spe­cific rec­om­men­da­tions for agri-econ­omy?

The prime min­is­ter has an­nounced a ru­ral in­sur­ance scheme for the farm­ers and I think that it will en­cour­age peo­ple to move ahead and take risks, which will help them to earn prof­its. It is im­por­tant that farm­ers take risks and get rich. This is how the econ­omy will grow. So, the prime min­is­ter’s orig­i­nal idea is to dou­ble the in­come of farm­ers and ev­ery ef­fort should be made to in­crease their in­come.

Do you think that cor­po­rate tax will be re­duced in this Bud­get?

We asked for sim­pli­fi­ca­tion while keep­ing rev­enues at neu­tral lev­els. Re­duce the cor­po­rate tax and get rid of the ex­emp­tions.

The lev­els to which cor­po­rate tax should be brought down?

We are look­ing at 18-20% cor­po­rate tax and zero ex­emp­tions.

What can the gov­ern­ment do to at­tain dou­bledigit growth in GDP?

You need a change in be­hav­iour to get such kind of GDP growth. Prime Min­is­ter’s Swachh Bharat scheme that was launched dur­ing his first ten­ure has brought a be­havioural change in terms of clean­li­ness. Sim­i­larly, some con­cept re­lated to change the be­hav­iour should be brought in as it cre­ates trust be­tween the gov­ern­ment and the in­dus­try, the gov­ern­ment and the so­ci­ety and the so­ci­ety and the in­dus­try. I feel the trust deficit is some­thing that is hold­ing it two points down be­cause peo­ple are scared of a lot of things. So, peo­ple should also be blamed for that scare due to over-reg­u­la­tion. If trust comes in and reg­u­la­tions will come down, the ease of do­ing busi­ness will in­crease. If you have trust, you will have more for­eign di­rect in­vest­ment com­ing to the coun­try. So, this is a key is­sue. First, let’s have a change in be­hav­iour and re­move the trust deficit.

By when do you think the econ­omy will bounce back on track?

It has been pre­dicted that the mon­soon will re­main nor­mal this time and the re­turn of the strong gov­ern­ment in power will change the sen­ti­ments. So, I am op­ti­mistic that the econ­omy will bounce back in the next twothree months.

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