Reiterating that a 'trust deficit' exists between Indian industry and government, India Inc has called on the Modi government to instill confidence in stakeholders. The comments came from the Confederation of Indian Industries (CII) as it put forth its Agenda for 2020, harping on simplifying and cutting taxes and duties, letting fiscal deficit grow to increase spending and shore up the economy and improving ease of business.
While CII president-designate Uday Kotak suggested having a flexible fiscal deficit target so that additional funds may be made available for infrastructure projects, which could help the economy to recover from the present slowdown, CII vice president T.V. Narendran pointed to the trust deficit. “Strengthening mutual trust and building a climate of business confidence by reassuring entrepreneurs in the true spirit of 'sabka saath, sabka vikas, sabka vishwas' can foster the growth process,” he said.
One of the main points industry has called for to address the trust deficit is decriminalisation of business laws, which the industry feels, could be the best way to address this trust deficit. “Decriminalisation of business laws, on the lines of what is being done for the Companies Act, would be a concrete step to address this trust deficit, Narendran added. Also, the policy measures espoused by the government must instill confidence in the stakeholders that they will be carried out. “To paint an ideal scenario, the acquisition of land should be simplified, the tax regime should be made stable, wages should be determined in accordance with the productivity levels, and there should be lowest possible deterrents to timely completion of projects,” he said.
Bajaj Auto honcho Rahul Bajaj had famously pointed out the 'trust deficit' between businesses and the government at a function a month ago where home minister Amit Shah, finance minister Nirmala Sitharaman and industry and commerce minister Piyush Goyal were present. Referring to an 'environment of fear', Bajaj had said, "You (the government) are doing good work; and despite that, we don't have the confidence that you'll appreciate criticism."
Another major demand from the industry for the government in 2020 is the need to simplify and reduce taxation. While Kotak has called for reducing long-term captial gains taxation to 10 per cent across all asset classes, the 2020 agenda also called for rationalisation of customs duty structure as well as simplifying and reducting GST slabs. Once that is done, it suggests that the practice of reviewing rates at every GST council meeting be discontinued.
