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Budget 2012: India Inc is impatient for reforms
India Inc is impatient for reforms. And this was more than evident at an ET NOW panel discussion on Budget Expectations of India Inc.
Some of the tallest leaders of Industry speaking exclusively to ET NOW asked the government to accelerate the reform process in this year's budget.
Rajan Mittal, vice chairman and MD of Bharti Enterprises urged the finance minister to not withdraw the stimulus provided to industry.
He says, "We are already seeing pressure of inflation, we also seeing slowdown in manufacturing, hope excise rates are not increased because that will get passed to the consumer."
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Union Budget 2012-13: Complete coverage
Budget 2012: India Inc is impatient for reforms
Even Harsh Mariwala, chairman of Marico feels that a hike in excise rates could hamper demand in key sectors like auto and consumer durables.
He says, "When interest costs are high and there is an overall slowdown in the economy, it will be tough on industry if excise rates are hiked, sectors like auto and consumer durables will see demand take a hit."
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Union Budget 2012-13: Complete coverage
Budget 2012: India Inc is impatient for reforms
He asserts, "In short term will have impact on demand.. no stimulus anywhere is going to be permanent. Industry will learn how to tackle with this."
The one issue on which there is absolute consensus among all sections of the industry is on the rollout of GST.
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Union Budget 2012-13: Complete coverage
Budget 2012: India Inc is impatient for reforms
India Inc is eagerly awaiting a concrete roadmap on the implementation of the landmark tax regime.
Says Rajan Mittal, "This is the most important reform from industry's point of view. Hope roadmap is fixed. All political parties need to support this. And we will look for clarity in this budget."
"Everybody in Industry assumes it's a done deal. Not having GST makes the industry uncompetitive because of multiple points of taxation," says Baba Kalyani.
However Harsh Mariwala is not hopeful of much progress in this year's budget.
"I don't think it can come on its own. Govt needs help and support of other political parties. So at best FM can lay a roadmap, and hopefully it will get rolled out the year after."
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Budget 2012: India Inc is impatient for reforms
Industry also wants the government to tame its burgeoning fiscal deficit.
The government is all set to miss its FY12 fiscal deficit target of 4.6 per cent by a wide margin and so Industry leaders feels its imperative for the government to announce a roadmap for fiscal consolidation.
Naina Lal Kidwai, country manager of HSBC admits its not going to be easy.
"We need a strong signal that the country is serious about sorting its burgeoning fiscal deficit. But it's not going to be easy when you have got a situation where subsidies are possibly going to increase.
The only way out is to increase taxes but that's not desirable as we can see growth going off the cliff."
Many in corporate India believe that the government needs to tap the equity markets in FY13 to raise money. And that probably is the only choice asserts Kidwai.
"Hope government pushes some of these public issues through IPO/FPO route as that will put equity back in the hands of retail investors and help the government raise some money."
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Budget 2012: India Inc is impatient for reforms
The other big demand of corporate India is predictability of policy implementation. S Gopalakrishnan of Infosys says, "We need government to act uniformly and swiftly whenever a clarification is sought.
Today we get stuck in tribunals and courts and the cost of doing business is very high. We need government to bring clarity on implementation of policy and regulation. This is most important as far as IT industry is concerned."
But it's not going to be easy for the government to meet all those demands at a time when the finance minister needs to get the fisc back in shape.
So will the FM manage a fine balancing act?
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