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Last Updated : May 23, 2019 07:10 PM IST | Source:

India Inc cheers Modi-led BJP's victory, but calls for inclusive economic growth

Top CEOs have called for the government to continue with taxation reforms, promote ease of doing business and boost job creation.

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India Inc has welcomed the thumping majority accorded to the Bharatiya Janata Party (BJP) in Lok Sabha Elections 2019.

At the same time, head honchos of the corporate world have called for strong economic reforms, including measures to boost the agrarian economy and manufacturing sector.

BJP and its allies are leading in 355 seats while the saffron party alone is leading in 305 seats.


Commenting on the victory, Tata Sons Chairman N Chandrasekaran said: "It is an endorsement of the reforms and huge changes underway that will bring growth, jobs and a better quality of life for all citizens. It also reflects wide support for the PM's vision for a prosperous India.

Hemant Kanoria, Chairman, Srei Infrastructure Finance, said that a clear mandate to BJP by the people of India will provide continuity to policies and development agenda.

Corporate houses also highlighted a list of issues that need to be looked at by the current government. These include taxation reforms, better infrastructure, employment generation as well as ease of doing business.

Ease of doing business 

The ease of doing business as well as the costs associated with it have been a matter of concern. Pawan Goenka, MD, Mahindra & Mahindra, told CNBC-TV18 that "we (India) need to focus on the overall cost of doing business and if we look at that specifically to manufacturing the cost of lending is the highest among large nations".

“Cost of power, logistics, taxes and time it takes to build a new plant to acquire land makes our competitiveness compromised. If our goods are not manufactured at good cost then we will be not competitive in export markets," said Goenka.

Kiran Mazumdar-Shaw, Chairperson and Managing Director, Biocon, said that ‘ease of doing business’ was identified as a key factor to restore investor confidence and push the economic growth agenda.

"While it is true that  India  has  moved  up  to  77th position in the World  Bank's  'Ease  of  Doing Business' ranking for 2018, NDA 2.0 ought to measure ease of doing business by benchmarking current practices with those of the Top 10 countries preferred by international businesses," she said.

Further, she added that perpetual licences with self-attestation and periodic compliance audits ought to be the way forward to break free from the 'licence raj'.

"Spearheading the world’s largest democracy is no mean feat, so congratulations to the winning team. It is time for us to drive positive change by leveraging digital technologies and embolden India’s collective dream of becoming a five trillion dollar economy. This also underscores the massive task that lies ahead of us - of shaping India’s future. It’s time for each one of us to step-up, collaborate and contribute towards the great India dream," CP Gurnani, MD & CEO, Tech Mahindra, said in a statement:

Sanjay Nayar, CEO, KKR India, said that while this verdict is music to the ears of foreign investors, PM Narendra Modi needs to implement dramatic administrative reforms.

Big names from each sector expressed their expectation from the new government for specific issues. Ajay Singh, Chairman and Managing Director, SpiceJet, said that they hope that the government would address the structural challenges facing the aviation sector urgently. This, he said, would make India a global aviation hub that surpasses Dubai, Abu Dhabi and Singapore.

Make in India 

The BJP government under Prime Minister Narendra Modi called for manufacturing products locally. The aim was to incentivise local production and thereby boost job creation as well.

Goenka explained that one of the initiatives of the previous government that perhaps got overshadowed by other priorities was Make in India. He added that manufacturing should be brought to the level to where the government wanted it to be.

Implementation issues of Make in India should be addressed, said corporates. Tax incentives as well as other benefits have been sought to ensure better utilisation of the programme.

Biocon’s Shaw explained that the failure to back Make in India with the appropriate fiscal incentives that could reduce cost of capital and cut the gestational time for realising return on investment led to sub-optimal investments in both greenfield and  brownfield  manufacturing  projects.

“NDA 2.0 must revisit this economic driver and reinstate Special Economic Zones and other fiscal incentives,” she added.

Job creation 

Goenka said that the biggest concern in the long term is job creation. He added that job creation and Make in India go hand in hand. While he admitted that there is no magic wand, Goenka added that what has to happen immediately is get consumption going.

The concerns about job creation creeped in after a leaked NSSO report in Business Standard stated that the unemployment rate in India is at a 45-year high.

Sajjan Jindal, chairman and managing director, JSW Group said, “I am certain that the government will focus on the larger economic agenda and will ensure job creation to elevate our youth.”

Similarly, Deepak Parekh, chairman, HDFC told CNBC-TV18 that the reform process will begin soon.

"We do not know what it is, but I am sure job creation will be part of it. And there is nothing better than pushing affordable housing and road construction to create more jobs. I think these two measures are massive job creators," he added.

Taxation reforms

Niranjan Hiranandani, Managing Director, Hiranandani Group, said that they are hopeful that the government will redress and resolve the prolonged issue of liquidity crisis that the sector is facing currently.

"Rationalising the taxes by subsuming stamp duty under goods and services tax (GST) will grand a big relief to the home buyers," he added.

GST was a reform was a move implemented by the BJP to have a system of simplified indirect taxes under one bracket. However, businesses were impacted in the medium term after GST was implemented in July 2017.

Shaw said that GST was a great reform that could have been the elixir for accelerating the wheels of our economy, but we botched up the rollout.

"NDA  2.0  must  urgently  fix  the  anomalies  and  implement  a  single slab GST of perhaps 15 percent to boost our sagging businesses and revive consumer spending," she added.

Dr. Prathap C. Reddy, Chairman, Apollo Hospitals Group, said: "My congratulations to the NDA led by Hon’ble Prime Minister Narendra Modi, on winning the people’s mandate for a second term in a row. The clear majority for a second term should give the government the fuel it needs to continue on the path of fiscal transformation and take the country to its rightful place in the global economy. The vote has clearly been for stability in the government and a stable forward looking policy should help bring in a renewed momentum leading to inclusive growth and development. I look forward to a continued focus on healthcare with Ayushmaan Bharat growing in scope to cover more beneficiaries with a prudent approach to pricing and reimbursements to encourage widespread adoption."

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First Published on May 23, 2019 07:10 pm
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