India Inc on Monday urged finance minister Pranab Mukherjee to speed up regulatory and procedural measures, especially relating to environmental clearances and land acquisition, to give a push to investment. The industry said in one voice that there has been complete stalemate on the reforms front, which needs to be addressed. Another major concern flagged was the rising cost of funds and the worsening European debt crisis.
The meeting saw India Inc’s top leaders including Tata group chairman Ratan Tata, ITC chairman YC Deveshwar, Bharti group chairman Sunil Mittal, Mahindra and Mahindra vice chairman and MD Anand Mahindra, Infosys chairman emeritus NR Narayana Murthy, ADAG chairman Anil Ambani and TVS Motor chairman Venu Srinivasan among others landing at North Block for a first-of-its-kind of meeting with the finance minister. The meeting assumes significance since it comes at a time when there are signs of sluggishness in the economy, slowing down of reforms, a government rattled by corruption charges and internecine corporate war leading to an overall unhealthy investment climate.
The meeting, which lasted for two and half hours, was however given a miss by Reliance Industries chairman Mukesh Ambani and Aditya Birla group chairman Kumar Mangalam Birla.
On the corporate rivalry part, the industry told Mukherjee that since there?s a shortage of natural resources, competition was bound to set in.
The setting of Monday?s meeting was aptly described by Mahindra who told reporters: ?It reminded us of the meeting the finance minister and commerce minister had with the industry in 1991.?
Mukherjee and Sharma assured industry captains that the perception was far gloomier than reality. The corpotrate leaders were also told that all important bills would be fast-tracked and passed in the ongoing monsoon session. The meeting was attended by secretaries of key economic ministries, so that specific queries or complaints could be immediately looked into. Sharma told reporters that industry members have been asked to send in their specific suggestions within four weeks.
Summing up the mood, Murthy said: ?We had a good exchange of views and with the cooperation of the FM, we can accelerate.” “The meeting was an extremely positive initiative by the government. The discussion was outstanding and took place in a frank and open environment. The government was receptive to the views of the industry and assured that it will take necessary steps to maintain the growth momentum. I am confident that we will see some major initiatives in this regard from the government, ? Sunil Mittal said. ADAG chairman Anil Ambani said: ?The interaction will certainly go a long way in building the momentum needed to catalyse economic growth. The finance minister and the commerce minister were receptive to a large number of suggestions made by industry to accelerate growth in key infrastructure sectors.”
“The message from the government was loud and clear that it is very serious to get growth back on track. There was a lot of discussion on introducing the next wave of reforms in the country mainly the Direct Taxes Code and the Goods and Services Tax. The central theme of the meeting was that perception is more negative than reality,” said Venu Srinivasan, chairman, TVS Motor. The ministers assured the industry that the reforms are here to stay and the government will push through some of crucial reforms initiatives without delay. ?Despite various reasons ascribed to the present slowdown, I am confident the economy will remain strong and the growth momentum in the medium term will remain broadly intact,? the FM said. He said that the rise in commodity prices and increased volatility of capital flows are matters of concern.
Later, Mukherjee told the media: “The industry gave many positive suggestions identifying areas where action is called for. We are confident the government and industry will overcome the problem and the journey to higher growth trajectory will continue.” Mukherjee told industry leaders that discussions are underway to further liberalise the FDI policy and the enabling framework of infrastructure debt fund has been approved by Sebi and will be notified soon.
The BK Chaturvedi committee on environment and coal mining has submitted its report and a group of ministers will soon discuss its proposals. Similarly, the reports of Vinod Dhall Committee on government procurement and the Chawla Committee on natural resources allocation are with the relevant committees of secretaries, after which it will be vetted by a GoM by the month-end. The Saumitra Chaudhury report on fertiliser subsidy reform will go to the GoM in next 15 days.
Some crucial Bills introduced in Parliament like the Pensions Funds Regulatory and Development Authority (PFRDA) Bill, Insurance Laws (Amendment) Bill, Banking Laws (Amendment) Bill, Regulation of Factor (Assignment of Receivables) Bill, and LIC Amendment Bill are expected to be passed in the current session of Parliament.