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India Inc wants more rollbacks

BS Bureaux

As Jaswant Singh takes over as the country's finance minister, India Inc has listed out what it expects him to do to strengthen the economy, the corporates and the markets. Given his closeness to the Prime Minister, most businessmen think he can pull it off by taking strong decisions.

Business Standard spoke to 52 businessmen cutting across various sectors like manufacturing, FMCG, infotech, banking, financial services, insurance and pharmaceuticals to put together the corporate world's wish list for Singh.

First and foremost, they want Singh to put the government's house in order by steering the Fiscal Responsibility Bill through Parliament which will help reduce public debt.

"Pushing the Fiscal Responsibility legislation without any dilution accompanied by a steady restructuring and downsizing of government will help in improving our credit rating," says Ficci president R S Lodha.

"Bring down the fiscal deficit to about 2 per cent of the GDP," says Videocon group chairman V N Dhoot.

Next on the wish list is more investments in infrastructure projects, especially power and roads. Says Venu Srinivasan, CMD, TVS Motor: "The thrust has to be on infrastructure development, particularly in the power sector.

In the last two-three years, no new power project has been finalised, there is no capacity expansion. It's a state-level issue but it requires central support. Singh cannot ignore this."

To give a boost to the fortunes of the corporate sector, businessmen in one voice want Singh to reconsider the double taxation of dividends announced by Yashwant Sinha in this year's budget.

"The double taxation of dividend should be rolled back; budget proposals should be in line with the long-term economic policy," says PricewaterhouseCoopers partner Deepak Kapoor.

Adds Wockhardt Chairman Habil Khorakiwala: "Negative things announced in the last budget should be corrected."

Besides, Singh is expected to bring continuity and consistency in the policies of the government. "The 10 per cent tax on the software service sector in this year's budget after announcing a tax holiday for 10 years has sent out wrong signals," says the head of a Delhi-based PC producer.

Adds Homi Khusrokhan, MD, Tata Tea: "I would be happy if the new finance minister can reduce the complexities in the tax system."

Businessmen want Singh to implement VAT as early as possible. "He should address the ongoing talks on VAT which is the concept of a uniform taxation in the country. Corporates have to suffer because of varying tax structure and are forced to have a depot in every state. VAT will help corporates plan their logistics in a better way," says Dr Morepen Ltd managing director Kartik Raina.

"We need to move strongly to a VAT system," says Godrej group chairman Adi Godrej.

So far as the stock market is concerned, businessmen feel Singh could help by sorting out the UTI mess and strengthening Sebi, while improving its co-ordination with other regulatory agencies.

Says Nimish Shah, CEO and director, Parag Parikh Securities: "For the markets it would be of prime importance if he can strike a better co-ordination amongst the various regulating agencies."

"His priority should be acting on labour reforms, divestment and privatisation. This alone will boost the confidence levels among the marketmen," says Abhay Aima, country head (equities), HDFC Bank.

The new finance minister certainly has his task cut out.

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