Welcoming various steps taken by the Government to curb black money and corruption, new ASSOCHAM President Mr. Sandeep Jajodia today said, as economy is still in the stage of remonetisation, the people should be encouraged and not discouraged to start spending again. Enough cash in both rural area and cities, along with some bold and pragmatic decisions on issues like bank NPAs would be key drivers for reverting to 8% growth, he said.
While extending ASSOCHAM’s full cooperation for the government’s drive against black money and corruption, Mr. Jajodia said, however, it must be ensured that there shall not be any tax terrorism and fear psychosis among the consumers, especially of high value products and services, as also the trade channels, must be avoided. Besides, government officials at all levels should be made accountable for their actions, Mr. Sandeep Jajodia said.
Lauding government’s sincere efforts in tackling NPAs of public sector banks, Mr. Jajodia said, we are faced with a situation where banks, with loads of cash, are finding it hard to lend despite lowering of interest rates……Apparently, there are not many takers for credit. “The credit off-take from the corporate India, in any case, would be quite low as long as the entire issue of non-performing assets, cleaning up of the banks’ balance-sheets is not resolved with a pragmatic approach and strong political will”. He said a clear distinction should be made between the willful defaulters and those whose business ran into difficulty due to external economic factors like volatile commodity prices or even those whose commercial decision may appear to be wrong in the hindsight.
Here again, someone at the political leadership, has to bite the bullet since the top bank managements, despite the new RBI guidelines are wary of taking hard decisions in terms of debt restructuring for fear of coming under the investigative scanner.
“This is a bad vicious circle, we should not allow ourselves to slip into, as the stakes are quite high for creating a huge number of jobs which is possible only through a vibrant economy built on strong consumer demand, robust manufacturing, trade and services and modernizing the Indian agriculture, integrating it well into the manufacturing of food processing”, Mr. Jajodia pointed out.
Dealing with a large number of macro domestic and global issues, the new ASSOCHAM President said for now, the government should further speed up infrastructure projects being financed by public funding in roads, highways, railways, ports and airports. The Budget for 2017-18 has provided for a sizeable allocation of Rs. 3.96 lakh crore for entire infrastructure space which is a commendable feat by the Hon’ble Finance Minister Mr. Arun Jaitely. However, it must be ensured that the execution of the key infrastructure projects is done with speed and efficiency so that a positive spin-off effect is seen across different related industries like steel and cement.
While the investment has to be led by the public sector, the private sector which is reeling under high leverage must be hand–held and roped in with new and innovative business models so that the industry can revive to its previous peaks. The total investment of Rs 2.41 lakh crore, provided in the Budget for rail, road, shipping, should be front-loaded so that the follow up impact can be seen across different sectors.
Creation of jobs for the youth, who are getting added in large numbers every year, is one of the prime responsibilities both for the government and the corporate India. As many as 12 million youth are ready to join the workforce per year which needs to be given jobs. The aspiration and dreams of the youth should be nurtured and adequate platform should be provided to them to perform. Initiatives like Startup India, Skill India are good initiatives but the implementation of these programmes must be linked to specific targets in terms of jobs.
Further incentives for investment into manufacturing, IT, infrastructure and other core industrial sectors would create more employment for the youth. A large manufacturing plant or a big infrastructure project creates lots of ancillary job opportunities which in turn give opportunity for start-ups by aspirational youth to unleash their entrepreneurial abilities” said Mr. Jajodia.
He said, the Industry is working closely with the Centre and the state governments on glide path for implementation of the Goods and Services Tax (GST), the biggest ever tax reform in the country. We hope that remaining areas of divergence among the centre and the states are resolved in the next meeting of the GST Council.
While praising the Government to give infrastructure status to affordable housing, Mr.Jajodia emphasized the need for further reforms / incentives for the entire reality sector, which again can create lakhs of new jobs across the value chain, starting from steel, cement, bricks and other construction material. The revival of the sector would then lead to resolution of the NPAs which have crept into the housing and realty sector. “This sector involves many SMEs as also the large companies, along with lakhs of skilled and unskilled workers in the business cycle.” said Mr. Jajodia.
As for the issue of protectionism being spear-headed by the Trump Administration, Mr Jajodia said the Indian government, industry, political leadership across different parties along with civil society must actively engage with the US Government, politicians, industry bodies and other stakeholders to drive home a point that the open trade policies help create jobs and not take them away. “The sectoral case studies on how the outsourcing has helped improve global supply chain across different sectors, with the help of technology, and created consumer demand and jobs in America should be pursued”.
On Brexit, he said, the Indian policy makers should remain pro-active about the turn of events and how the entire Brexit deal is negotiated between the EU and Britain and fine-tune our policies accordingly.