Adi Godrej, chairman, Godrej Group and President, CII, says that Lok Sabha's vote for retail FDI is a very strong signal and this will lead to more reforms. He also feels that pending reforms like FDI in insurance and pension funds will also go through and GST may see light of the day in 2013.
Q: The government has won the vote on the FDI in multi-brand retail motion moved by Sushma Swaraj in Parliament in the Lok Sabha, the Rajya Sabha is another matter, but as far as the signal is concerned, is this a strong enough messages, a strong signal or the uncertainty will continue to persist?
A: No, I think this is a very strong signal. It is clear that the government has own the vote and it will lead to more reforms. I think some of the pending reforms in Parliament such as insurance and FDI in pension funds will also go through and I feel this will enable the government to take forward other even more important reforms like the Goods and Services Tax. So, I am very happy to see that FDI in multi-brand retail has been approved by the Lok Sabha and I feel this is an important turning point in the reform process in India. Hopefully, this will lead to a strong GDP growth in 2013-2014 in India.
Q: You say that this an important turning point but it is not law yet till the Rajya Sabha clear it. Do you believe that post this defeat the BJP will stop playing hard ball as far as other FDI related proposals are concerned? You talked about pension and insurance where the standing committee led by Yashwant Sinha has stridently opposed the upping of the cap from 26 percent to 48 percent. Do you believe that the BJP will now give up that resistance?
A: I think it is very important that political consensus be arrived at in taking the reform process forward. So, I do hope so and I expect it will happen that way.
Q: Is your fear now that the BJP which has been opposing the GST and negotiations haven't really gone very far because of opposition from states like Gujarat and Madhya Pradesh. BJP will in fact now try and make it harder for the government to push through the GST?
A: I don't believe so because some progress in the GST has already being implemented. I do feel that this will be a strong turning point and I feel confident that the reform process will move faster now. I don't think the GST will be opposed because I think there is some understanding between the finance minister and the chairman of the empowered committee . So, I do hope the GST will go through in 2013.
Q: If you heard the debate in Parliament from one opposition party to another they sorted dooms day scenario being painted that if you actually allow FDI into multi brand retail it is going to be anti-poor, anti-farmer, anti-national, it is going to wipe out small retailers. Is it not the need of the hour for industry to actually step up, it is public relations exercise to spread the message as far as not just retail but the larger reform agenda is concerned? Industry must also now communicate and articulate how reforms can change and empower common Indians?
A: Industry has done a lot to do so. We have been talking about the benefits of reform and we must realise that politically sometimes this rhetoric does continue. Earlier, we had a movement against computerisation in banks and typically it was thought that it would put people out of jobs.
Now, nobody even thinks against computerisation in banks. So, productivity improvements have always been opposed politically through history in the developed world, in the developing world but I am very glad that in our country good economic sense has prevailed.
Q: This is a hypothetical situation still because we haven’t seen the discussion or the vote taking place in the Rajya Sabha. But what we are picking up from the corridors of power is that in the Lok Sabha while the government was very comfortable and confident in the Rajya Sabha the picture maybe different. If the situation in the Rajya Sabha will actually lead to a disruption, there is no vote, this cannot actually become law. What then will the message be to the world because you would have gone through this battle in the Lok Sabha and this policy will still not be enacted into law because the upper house refuses to vote on it?
A: No comments on hypothetical situation. Let us wait till the Rajya Sabha does vote on it. I do hope that even the Rajya Sabha passes this very important piece of legislation. I am not saying it is important piece of legislation in itself, it is important, but I think as a major reform indicator the creation of a perception of reform in the country this is a very important item.
Q: As the president of the Confederation of Indian Industry, as the man who has been leading a business conglomerate for so many years in India. What would your message to the opposition party at this point of time?
A: I think it is desirable that political considerations do not come in the way of economic decision-making in the country. I think it is harming the country and I hope that that is not the way-forward and I do hope that political parties come together on economic reforms and most would privately accept to be good for the country.