RBI should cut key policy rates by at least 50 basis points

Written by Neha Pal | Neha Pal | Updated: Jan 23 2012, 08:06am hrs
The new Ficci president and the chairman and managing director of Kanoria Chemicals and Industries, RV Kanoria, shares his focus areas as Ficci president with FEs Neha Pal.

What will be your agenda as Ficci president

Ficci would strengthen its physical presence in states by opening more offices to deepen its engagement at the state level with all stakeholders. We will actively work with global counterparts to provide business linkages to the local industry to facilitate foreign investments in the states. Ficci shall closely engage in the finance sector since major reform in this sector is proposed. In the proposed Direct Taxes Code, we would like to see a drastic reduction in discretionary taxes. In indirect tax, GST will do away with multiplicity of rates.

Your expectations from the forthcoming monetary policy review by the RBI

We want that the RBI should cut the key policy rates by at least 50 basis points. Now that inflation has come down, government should lower the monetary rates as it is contributing to manufactured goods inflation, which is affecting the masses.

What are your expectations from Budget

Ficci expects the Budget to be framed in the backdrop of ongoing economic downturn, rapidly declining industrial growth and weak investment sentiments. The government can look at widening the direct tax base, privatise coal mines, build inventory of government assets other than PSUs that can be monetised, reduce rate of MAT to a reasonable level not exceeding 50% of the basic corporate tax rate.

How do you think the government should tackle issues like inflation and black money

There is clearly a need to build political consensus on the reform level, which is lacking in the government. Be it FDI in multi-brand retail or the pension Bill, which are still stuck somewhere in the middle, there is a need for leadership to build consensus. As far as black money is concerned, the government is under pressure to bring back the black money and amnesty scheme can be one of the solutions to the

problem.

What are the major initiatives that Ficci will embark upon during the current year

Ficci will undertake a survey of 10,000 plus farmers in 20 states to develop a farmers confidence index which would be a reflection of aspirations and policy changes required by the farming community. Secondly, Ficci will take a PPP initiative under which we will connect a million farmers to companies for integrated agriculture development, wherein companies would provide end-to-end solutions to farmers.