In an exclusive, CNBC'S Akiko Fujita caught up with R Shankar Raman, CFO, Larsen and Toubro to ask about the Modi government’s biggest tax reform – goods and services tax (GST) and the impact of that on his company and the views of India Inc.
He said, India Inc is happy with the transformation themes/reforms taken up by Modi government but only worried about speed of translating the themes into actions. “The pace at which the themes were rolled out, to most of our minds - it looked like homework of implementation has also been addressed but what the bureaucracy and possibly the ministries and participants are dealing with is the ability to narrate to the theme and see how easily they can connect with what is being dished out,” he said.
According to him, GST historically – looking at all the countries that have implemented it from their legacy taxation structures, almost all have taken a dip in growth for two to four quarters.
Therefore, for their company as well, the volumes are expected to shrink initially on account of GST, till the participants get used to the new system, he said, adding that in the transition, the key driver would be how quickly and how painlessly we can get to compliance mode. “My own guess is for 2-4 quarters there could be some slowdown, relative to earlier couple of quarters,” he said.