Home > Business > Business Headline > Report
India Inc wants fast action on FDI, taxes, labour laws
BS Bureaus in Mumbai & New Delhi |
May 21, 2004 09:00 IST
India Inc has its wishlist ready for the new Prime Minister. And it wants Prime Minister-designate Manmohan Singh to complete the reforms agenda in key areas like public finance, foreign direct investment, labour laws, privatisation and devise ways to stimulate growth in the rural markets.
To begin with, industry would like Singh to roll out a value-added tax regime at the earliest, prune excise duties on commodities and lower corporate and personal income tax rates.
"VAT needs to be introduced to avoid the cascading of indirect taxes and achieve competitiveness," Larsen & Toubro Ltd chairman and managing director A.M. Naik said.
"Corporate taxes should be reduced where as its compliance should be strengthened to achieve the same goal," Lupin chairman Desh Bandhu Gupta said.
"The government should desist from walking into the subsidy trap once again," added Anil Singhvi, executive director Gujarat Ambuja cements Ltd.
In the area of FDI, the corporate world would like to see Singh move fast in opening up the retail sector. "A boost to organised retailing in India can grow multifold if FDI is permitted in retailing," said B S Nagesh, customer care associate, managing director and CEO, Shopper's Stop Ltd.
Added Rajeev Karwal, CEO and managing director, Electrolux Kelvinator: "This government should recognise the huge potential of the retail industry. FDI should come in to the sector soon as there is a lot of investment waiting to happen here."
However, a view also emerged that the presence of the Left parties in the Congress-led alliance could take its toll on any further liberalisation of FDI norms. "I don't expect much in the FDI policy," Godrej Group chairman Adi Godrej said.
JK Industries managing director Raghupati Singhania highlighted the urgent need for labour reforms if the manufacturing sector in the industry were to become globally competitive. "We need labour reforms to improve the work culture, mindset and productivity," he said.
Though most businessmen felt Singh's hands were tied so far as divestment was concerned, the said the programme of the earlier government should be pressed on with.
Said Saurabh Srivastava, chairman of Xansa: "I would like to see an end to this talk of divesting only sick companies. Divesting is not akin to selling crown jewels. The process can only increase efficiencies and unlock the value of state enterprises."
Public sector banks too are keen that the government divests its holding to 33 per cent, from the current 51 per cent.
This reduction in government holding would bring about professionalism and help banks shore up capital needed to meet the Basel II norms.
At the same time, a leading public sector bank chief acknowledges that Left parties may not allow the dilution of the centre's stake. As it is the bill to bring down the central government's stake to 33 per cent has been hanging fire for the last couple of years.
Still others hope Singh will take steps to improve rural incomes in order to improve the purchasing power of the people. "We need a second Green Revolution," Apollo Tyres chairman Onkar Singh Kanwar said.