Sharing a panel with Reserve Bank of India(RBI)governor Bimal Jalan on Monday at the India Today Conclave, Mr Ambani said the perception among a section of thinkers and government that custom duties are unearned perks of Indian industry was “skewed”.
He cited the examples of Nepal and Sri Lanka which, he said, were being used as corridors for import of goods produced in other countries. “India is losing revenue and the industry is getting affected. India has to look after its own interests.”
Mr Ambani said the industry could achieve competitiveness only if it is provided with low real rates of interest, access to capital at competitive costs, flexible labour policy and a globally benchmarked tax structure.
Mr Ambani said he was a strong supporter of globalisation of Indian economy, but, at the same time, the government has to address the causes of high cost economy. “The industry and the government should have a combined thinking on reduction of tariffs.”
Mr Jalan, responding to a query on high lending rates in India, said the country should have flexible rates. “It is the most important issue,” he noted.
Bur, Mr Jalan said, most banks were locked into long-term interest rate commitments on fixed deposits. With as much as 80 per cent of fixed deposits locked for a period of 3-4 years, it is difficult to adopt a flexible interest rate structure.
On capital account convertibility, Mr Jalan said there was no time frame for its implementation. “The world has come down to India’s views on this issue. It is better to be careful and safe rather than be sorry,” he said.
“We demand a competitive industry, but should we not demand a government like that,” he asked.
Mr Ambani, managing director of the country’s largest private sector company, said the success milestone should be set for industry and as each milestone is achieved, the customs tariffs should come down.
He said the government’s prime focus should be to create a globally competitive domestic industry, which produces goods of highest quality.