Call for clarity on reforms, GST Bill

Dated 23rd February, 2016

For the infrastructure sector, the first and foremost expectation from the Budget is clarity in policies and reforms. Implementation of the proposed Goods and Services Tax (GST) Bill and consistency in the taxation regime also top the charts.

These were among the wishlist of the top representatives of the core infrastructure sector who converged at the pre-Budget roundtable organised jointly.

Michael Thiemann, Chief Executive Officer of the Indian operations at Thyssenkrupp, said: “We are living in the VUCA (volatility, uncertainty, complexity and ambiguity) environment and you have to be fast and flexible.

“You should have a strategy, but you should be prepared to change that.”

There should be ease of doing business, Thiemann said, adding his humble wish was “don’t make too many changes”.

Union Finance Minister Arun Jaitley will present the Budget on February 29, which, according to many panellists, is a make or break budget for this government, coming at a critical time for the economy.

Banking system

Seshagiri Rao, Joint MD and Group CFO, JSW Steel, said: “To accelerate growth and create jobs, we need a strong banking sector. Today, the non-performing assets of banks stand at eight per cent and it could further rise. So, we need a roadmap in the Budget on how do they plan to make the banking system stronger.”

More outlays for infrastructure in the Budget, but without sacrificing on fiscal consolidation, a clear roadmap for tax reforms without further delays are others on Rao’s wishlist.

He also wanted the government to spend the earlier announced outlays.

“Everybody is looking at the rollout of GST, which is slated for April 1, 2016,” Rao said, adding a fine balancing act is required to maintain fiscal consolidation and growth.

Many others in the panel also batted for clarity on policies and GST.

Umesh Revankar, Managing Director and Chief Executive Officer, Shriram Transport Finance Company Ltd, said: “GST will help in reduction of logistics costs because it eliminates the need for a warehouse in every state and reduces transportation charges.”

A milestone-based roadmap for the delayed projects such as Delhi-Mumbai corridor should be “spelt out clearly”.

However, there were others who did not want a status quo.

Ananda Bhoumik, Managing Director and Chief Analytical Officer, India Ratings and Research, said: “We would not like to have the sense of déjà vu at this juncture. What everyone is looking for is clear signals and clear directions; certainly, international investors are looking for that.”

“If this Budget is a rehash of the previous years’, then I don’t want that,” Bhoumik added.

Walmart India President and Chief Executive Officer Krish Iyer sought an industry status for the retail sector.

“Giving an industry status to retail will make a big difference to the growth of the sector per se and help in job creation. Now, the sector accounts for about eight per cent of the total direct employment, and with proper fillip, it could create more employment,” Iyer added.

Samir Kanabar, Partner, Tax, said: “The Government should come up with a flat rate of tax for infrastructure sector, do away with Minimum Alternate Tax, and bring in a roadmap for solar projects.”

“The government had earlier announced an infrastructure fund of  50,000 crore. We need clarity on this,” he added.

(This article is published in The Hindu Business Line on 23 Feb, 2016)