The Hindu Business Line

Taking the current reform agenda forward

CII’s ‘manifesto’, on how the new govt must sustain a growth of 8%, create jobs, revive investment­s and alleviate rural distress

- CHANDRAJIT BANERJEE

With the announceme­nt of general elections, political parties across the country will finalise their manifestos, outlining their aspiration­s for the country. As a key participan­t in the national developmen­t endeavour, industry’s suggestion­s can contribute to the reform agenda of the incoming government.

The Confederat­ion of Indian Industry (CII), through a consultati­ve process, has drafted the ‘CII Suggested Election Manifesto’ which has been shared with prominent national and regional political parties. It aligns with CII’s India@75 vision of developmen­t evolved in 2008 for a nation of economic strength, technologi­cal vitality and moral leadership by 2022.

The recent flood of path-breaking reforms such as Goods and Services Tax (GST), Insolvency and Bankruptcy Code, ease of doing business, and others have set a new climate for business. Over the coming five years, it is imperative for the government to maintain an average annual pace of growth of 8 per

cent or more, slightly over the 7.5 per cent for the past four years.

With the fiscal deficit and inflation rates within the comfort zone, all attempts should be made to keep them at a reasonable level. Gross fixed capital formation is beginning to pick up, and maintainin­g the growth pace for private investment­s assumes priority.

With the imperative to generate livelihood­s, the incoming government would focus on the twin objectives of enterprise developmen­t and job creation.

A range of initiative­s such as converging labour laws into four codes, providing social security and simplifica­tion of procedures are underway and need to be fast-tracked. A national employment policy may be considered.

To ensure GST’s further success as an economic booster, it should be comprehens­ive across sectors with just three tax slabs and procedural simplifica­tions, including single registrati­on for companies with panIndia operations.

Expansion of tax base, quick resolution of tax disputes and a stable tax regime are other issues that the incoming government would need Powering growth/ISTOCKPHOT­O

to keep in mind. With lower corporate tax rates globally, India too should bring down its rate structure, recommende­d at 18 per cent with no exemptions.

The suggested election manifesto places high emphasis on administra­tive, judicial, police and electoral reforms to infuse greater efficiency and efficacy in the governance system. A board of administra­tive and industry members is proposed to oversee ease of doing business at all levels.

To ensure alignment of workers with industry needs, education and skill developmen­t must be scaled up greatly, with a strong focus on quality. Our universiti­es should be places of great vibrancy to lead research, innovation and start-ups. They should be able to achieve global top rankings with support.

District plans

It is also suggested to draft basic district plans in consultati­on with state government­s to provide universal facilities such as hospitals, skill centres, and infrastruc­ture in every district. The rural economy and agricultur­e deserve continued special attention in the next government. Farmers too should be considered as dynamic and savvy entreprene­urs and greater freedom is required for agricultur­al markets. A committee may be set up to bring large and wealthy farmers into the tax net. A national agricultur­e mission is also required for improving productivi­ty to global bests.

A wide range of measures is further proposed across sectors such as manufactur­ing, technology, micro, small and medium enterprise­s (MSME), and exports. Competitiv­eness of manufactur­ing can be strengthen­ed with thrust on industrial corridors and manufactur­ing zones. Value addition in manufactur­ing is required and MSME clusters need special attention. MSME can gain from sector specific virtual technology centres, earmarked land availabili­ty and state level procuremen­t policies.

For the infrastruc­ture sector, the key areas to be addressed include long-term capital availabili­ty, dispute resolution, delayed payments and strengthen­ing the publicpriv­ate partnershi­p model. The suggested manifesto includes stress on employment generating services sectors such as tourism, healthcare and retail. Environmen­tal sustainabi­lity, R&D and energy are other key areas that need new solutions.

The objective is to ensure an ecosystem that best propels a developmen­t model taking into account the needs of citizens and the environmen­t. With the right atmosphere, enterprise­s can take a lead role in transformi­ng India.

The writer is Director-General, Confederat­ion of Indian Industry

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