Delayed tax reforms continue to pose operational bottlenecks to streamlined movement of goods and services across India and the shadow of bad assets continue to haunt the Indian financial sector, according to Tata group Chairman Cyrus Mistry.
In his address to shareholders in the Annual Report of Tata Motors, Mistry, who is also the Chairman of the homegrown automobile major, however, said there is a positive sign of a more mature and responsible economy.
“The continued delay of some of the tax reforms continue to pose operational bottlenecks in a more streamlined movement of goods and services across the country,” he said.
Despite repeated attempts by the BJP-led NDA government to pass it in Parliament, the GST has been hanging fire with opposition Congress yet to come on board.
The government is hoping to pass the GST bill in the upcoming monsoon session of Parliament.
Mistry further said: “The shadow of NPAs continue to haunt the Indian financial sector even as the sector is all set to grow with new financial institutions.”
The banking sector non-performing loans (NPL) rose sharply in 2015-16 to over 13 per cent, or over Rs 8 trillion, as of March as a result of stricter NPL recognition standards.
Mistry, however, said despite 2015-16 being one of continued global volatility across different markets, the news was more positive for India with robust GDP growth, making the country one of the fastest growing economies worldwide.
The sustained start-up environment has also played an important role in bringing in global and domestic investment, opening up new opportunities and also helping to carry economic development beyond just the tier one cities, he said.
“Moreover, there is, rightly so, a greater thoughtfulness towards investing in new or emerging companies with a greater attention to the right business models. This is a positive sign of a more mature and responsible economy,” he added.
On Tata Motors group, he said 2015-16 was a year of mixed results but it was important to note the return to profitability.
“It was therefore a turnaround year, backed by strong Jaguar Land Rover growth despite challenges, as well as the start of the turnaround for Tata Motors standalone,” he said.
Jaguar Land Rover continued to show strong global sales, despite the China slowdown. It showed a strong growth in the key markets of North America and Europe, Mistry said.
The British arm’s solid financial performance through last year was clearly showcased by its selling more than half a million cars in one year for the first time.
“Last year, it thus produced and sold more cars than at any time in its history. Its vehicles have received more than 140 awards for design, technology, safety and environmental sustainability,” he said, adding JLR is one of the UK’s largest exporters, with more than 80 per cent of its revenue coming from exports.