'Big bang' reforms needed to push demand, private capex; GST cuts not enough: Jamshyd Godrej

Nobody is going to invest unless the demand is clear, said Jamshyd Godrej

Godrej Enterprises Group chairman and managing director Jamshyd Godrej believes that private firms will increase capital expenditure only if the demand is clear and more needs to be done beyond the recent rationalisation of goods and services tax (GST) rates in order to ensure ease of doing business.

Jamshyd Godrej was speaking at a media roundtable on September 9, following group firm Godrej Interio's announcement of a major rebranding exercise as well as plans to increase revenue and market share in the near term.

The group unveiled a new brand identity for Godrej Interio, branding it ‘Interio by Godrej’, and also announced the opening of 300 new stores in the consumer-facing business over the next two-to-three years. The programme also includes refreshing existing stores and upgrades in the firm’s manufacturing facilities.

"Nobody is going to invest unless the demand is clear... All that has been done is the rationalisation of GST. What we need is a growth imperative. It is not only GST, but there is a whole host of deregulation that has to happen, like ease of doing business. There are so many areas the government can work on. The big bang reforms are many decades old now. So we need plenty more big bang reforms constantly. Only that will ensure more capex and investment," he said.

When asked about specific reforms, Godrej said that "significant" deregulation in every area should be pursued by the government.

He also cast doubt on the effectiveness of income tax cuts announced by the government earlier this year, with Godrej noting that the benefits may have been used to relieve debt, rather than drive consumption.

"Growth drivers are not these little sops. For example, due to the tariff problem now, the government is talking about improving export incentives and competitiveness. Look at our market share in exports and global trade. If we can double that and see the growth. There are enough and more avenues available if we want to do it," Godrej said.