Economy moving in right direction to achieve 8% growth: Harshavardhan Neotia, FICCI President (Exclusive)
New Delhi: Harshavardhan Neotia, the new President of FICCI (Federation of Indian Chamber of Commerce and Industry), is a man full of optimism. Despite all the challenges that Indian economy is facing presently, Neotia believes
POLICY PARALYSIS: HAS IT RETURNED TO HAUNT US?
Q: Has the ‘policy paralysis' era returned to haunt the government and the industry? Many things have got stuck in the parliament, for example, GST bill is not getting passed. Are you worried on this account?
H Neotia: Not really. Because the GST has hogged the limelight and it has become a kind of headline issue and is being contentiously debated politically, we are assuming that everything has come to the standstill. That's not true. There are lots of things that are happening on the ground. There are many administrative measures that are taking place. Many legislative measures have also been approved by every party including the opposition. There is movement although we can always hope for faster resolution of some things that are stuck as well. I don't think we are hopelessly stuck. We are a bit delayed and that is something we have to live with it in a democracy.
GST STALEMATE IN PARLIAMENT
Q: How does FICCI look at the GST stalemate in parliament?
H Neotia: Well, we have lived without GST till now; we will live without it a few more months as well. Our view is that it's an important legislation that needs to be pushed and passed. We believe it will help the country in unifying the market. We believe it will add some momentum to the GDP. We also believe that it will bring into net lot of tax avoidance that may be happening. It is a very good and probably one of the most important tax reforms of recent times.
So, FICCI is strongly of the view that it should happen quickly but there are some points on which there are some contentions and it appears that on some of them there is some emerging solution. So, hopefully, it will happen.
Certainly, we agree with Finance Minister Arun Jaitley that a delayed GST is better than a flawed GST. There is no point in just pushing through a reform that we all feel was not the way it should be. We have lived for so long without GST, we can wait for a few more months but it's better to have a GST where there is consensus and all the relevant issues raised are addressed.
STOCK MARKET CRASH
Q: Stock market has touched a 20-month low. Should it ring the alarm bells? What should the government do to bring back the confidence into the stock market?
H Neotia: Well, stock market is one indicator but it is not the only indicator of the economy. As you know, a lot of international factors and sentiments go into euphoria as well as into a tumble. Neither should we get very excited when there is euphoric rise nor should we get overtly depressed when there is a bit of a downturn, as far as the stock market is concerned.
But yes, it's certainly an indicator of how things are and as far as the government is concerned, they need to keep pushing the reforms, do the disinvestment that is required, push public investment, create ease in doing business, and reduce the cost of business. All of this, in some measure, I think they are doing. We have advised them only to increase the pace of activity.
CHINESE SLOWDOWN AND OPPORTUNITY FOR INDIA
Q: Everybody is worried over the Chinese slowdown in which their ageing workforce and increasing wages have played an important role. But another view point is that it provides India with an opportunity to attract more investment. Is the Indian industry ready to grab the opportunity?
H Neotia: See, we live in an interconnected world. Any part of the world and particularly a huge giant like China, getting impacted will impact the world and therefore impact India as well. But yes, with every such change that happens in the geopolitical space right across the world, there are opportunities that emerge for other countries. I'm sure that Chinese slowdown is certainly going to impact India and in some ways help India. We have to become more competitive, we have to scale up our operations.
We do see opportunities that this situation brings but in short term there may be challenges. Now, we are faced with Chinese dumping in our country and that is a matter of concern for local industry as well. So, in today's world, we can't say that one's problem is someone's solution. It's a combination of opportunity as well as threat.