PC promises India Inc better investment climate in FY06
Finance minister, P Chidambaram, on Friday told India Inc that he would take their inputs to streamline the tax structure to improve investment climate.
By TNN |
DELHI: Finance minister, P Chidambaram, on Friday told India Inc that he would take their inputs to streamline the tax structure to improve investment climate, for the next budget. The minister also assured more action to reform investment rules at a meeting with the chief financial officers of leading companies today, to assess their take on the investment scenario in the economy.
In turn, India Inc has asked for improvements in infrastructure including better availability of energy. They said the government must change the rules to allow private sector to invest in coal mines, besides steps to liberalise the power sector.
They have also pitched for more financial sector reforms, including that of debt market to make it easier for the industry to raise capital, and regulatory changes to push the GDP growth rate by at least another percent, from the current 6.9%.
Mr Chidambaram assured CFOs that the government would carry out procedural improvements and remove bottlenecks coming in the way of investment and growth. He told them, he would meet them again in the run up to budget ’06-07, for a detailed discussion on ways to streamline the tax structure.
The CFOs also pitched for a better Intellectual Property Rights regime, as necessary condition for luring more foreign investments into the country.
Briefing newsmen after the meeting, chief economic advisor, Ashok Lahiri, said, “The focus of the meeting was on investment, globalisation and the exchange rate.”
He acknowledged that problems of making fresh investment dominated the agenda. “Productivity of Indian industry has improved. But leveraging productivity for further growth is limited. So fresh investment is needed to augment capacity,” he said.
In turn, India Inc has asked for improvements in infrastructure including better availability of energy. They said the government must change the rules to allow private sector to invest in coal mines, besides steps to liberalise the power sector.
They have also pitched for more financial sector reforms, including that of debt market to make it easier for the industry to raise capital, and regulatory changes to push the GDP growth rate by at least another percent, from the current 6.9%.
Mr Chidambaram assured CFOs that the government would carry out procedural improvements and remove bottlenecks coming in the way of investment and growth. He told them, he would meet them again in the run up to budget ’06-07, for a detailed discussion on ways to streamline the tax structure.
The CFOs also pitched for a better Intellectual Property Rights regime, as necessary condition for luring more foreign investments into the country.
Briefing newsmen after the meeting, chief economic advisor, Ashok Lahiri, said, “The focus of the meeting was on investment, globalisation and the exchange rate.”
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He acknowledged that problems of making fresh investment dominated the agenda. “Productivity of Indian industry has improved. But leveraging productivity for further growth is limited. So fresh investment is needed to augment capacity,” he said.
He listed sectors like automobiles and auto components, agro-based industries, pharma, tourism and hotels as those which are poised to witness major investments in the years to come. These sectors have the potential to create large-scale employment as well.
Talking to reporters later, Tata Steel vice president (finance), Koushik Chatterjee, said infrastructure climate must improve for large capital expenditure to take off.
“We are now facing a fuel famine. We must ensure better fuel supply,” said DD Rathi, CFO Grasim Industries. He also highlighted the need to carry out debt market reforms and allow corporates to raise resources through private placement of non-convertible debentures.
The CEA said the perception about India has improved and the country is being regarded as an investment destination, especially for high-end and engineering sectors. He also pointed out that some of the Indian companies have established their footprints abroad.
Admitting that there were several impediments coming in the way of investments, Lahiri said the country needs to speed up infrastructure development, especially in power and roads sectors. He also highlighted the need to step up rural credit as a pre-requisite to foster industrial growth. “The FM has said that rural credit was one of his priority areas. Industry will grow better if rural credit increases.”
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