The new Ficci chief hates cess of any kind. He believes any such move would be detrimental to the growth and expansion of India Inc.
NEW DELHI: The new chief of the Federation of Indian Chamber of Commerce and Industry (Ficci), Saroj Kumar Poddar, hates cess of any kind. He believes any such move would be detrimental to the growth and expansion of India Inc. Touching upon the industry stand on reforms in labour laws, the Ficci president said the whole issue is widely misunderstood.
“It indicates as though the industry is asking for a hire and fire law, but this is not so. Rather, flexible labour laws will help generate more jobs,” he said.
The government, he said, should allow contract labour in all special economic zone(SEZ) units first, then in the export industry and later it can be extended to industry in general. The chamber chief is confident that the pension reforms bill will be passed though there will be some initial objection from the Left quarters.
On the variance of views in the government regarding issues such as divestment, Poddar said there appeared to be no difference of opinion between the UPA government and the Left on certain matters of privatisation of loss-making public sector units.
In case the government is unable to privatise the sick units, it should monetise the assets, Poddar said, adding “Why should the government pump in money if they are unable to produce?” Excerpts from the interview:
How will you go about creating a political momentum for reforms?
The political momentum is already there and the govt is also committed but still, we need greater momentum by building consensus. For example, for 90% decisions, the government can seek and build consensus but for the rest 10% the government has to be bold and just go ahead and do it, so that economy and the growth do not suffer. The time has come now when government must take hard decisions.
The cess on education faced strong disapproval from several quarters, specially from Ficci. Now the govt is planning a health cess and labour cess for the unorganised sector. How are you looking at this?
Ficci just does not support any idea of cess because it is not in the interest of growth and expansion. Our tax rates are much higher and not in line with even the Asean rates. We strongly appeal to the govt not to impose any cess. In fact, whatever cess is there should be dispensed with. Also, the overall corporate tax must come down to 25% as against around 40% now. More tax does not mean more resource mobilisation at all. In fact, our finance minister has very well demonstrated that a lower tax rate helps in revenue buoyancy.
Left parties have asked the government to impose luxury tax and conspicuous consumption tax. How will Ficci counter this?
It is very difficult to define what is luxury and what is conspicuous consumption. Moreover, the government is encouraging people to buy luxury goods and thereby pay value-added tax (VAT). Why should anybody be worried about the consumption? If somebody is paying for a certain thing from his after-tax earned money and the government is collecting revenue, what is the problem?
We have a coalition govt, where the Left plays a major role. How do you propose to lobby with the govt and mould policy according to the need of the industry?
For the UPA govt Left support is very important and at times Left views are at variance with the other parties. Ficci will put its viewpoint to govt and the constituent parties. We will explain the rationale and try and make them understand. We will talk to Left, interact and see how best we can help govt to move forward. It is part of our responsibility to take the Left and work.
Is Ficci concerned with the pace of reforms?
We need to accelerate reform process. Infrastructure development is a major area of concern. In fact, getting requisite approval for the projects is the bottleneck. To begin with, the govt can decide on 100 projects in infrastructure sector, get approval for the projects and then offer them on global competition basis. This would not only make the process quick and transparent but also help govt mobilise resources and India Inc will happily invest in the country.
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