India Inc’s top heads said the government has to play the role of key enabler to reboot the country’s slowing economy. Lauding the recent major reforms, including corporate tax rate cuts announced by the government to resuscitate the economy, they made a strong pitch for resolving credit and decision-making gridlocks and saving ‘national treasures’, such as the beleaguered Jet Airways.
“When a Jet Airways goes out of business, it’s just not one company going out of business. It is a vital national aviation structure that has disappeared overnight. Seven or eight telecom companies have completely gone out of business,” said Bharti Enterprises chairman Sunil Mittal. During a panel discussion on tackling the slowdown, the leaders said India is going through a period of ‘reset’, whether it is adopting GST or going into digital mode as far as currency is concerned.
“There are global headwinds - you look at Europe and other countries. There is a general sign of an economic slowdown. Within India, in the last three to four years, execution has been weak. There has been a general sense of low spending, many projects have been adding inventory. The morale in lending institutions has been low and that needs to kick-start. Enablement will be the first call of action for the execution to start,” Mittal said.
Infosys’s non-executive chairman Nandan Nilekani said the next big thing on the government’s agenda should be to revive credit to small businesses across India. “Only 8% of Indian small businesses get credit from the banking sector. It is due to public sector banks having high NPAs and NBFCs having asset liability mismatch. If we do a new cycle of credit, we should do it very differently...,” Nilekani said, while referring to digital modes of transactions and applications.
Echoing his views, Kalpana Morparia, CEO, South & South East Asia, JP Morgan, said, “In this new digital world, you will see a paradigm shift in the ways banks function.” “Competitive tax rates are fundamental in increasing FDI. The recent tax cuts send a signal that the government has listened to feedback. This makes it encouraging to invest in a market such as India,” said David Sproul, global deputy CEO of Deloitte.
Other panelists at the roundtable included, Uday Shankar, chairman of Star & Disney India, Anu Aga, former chairperson of Thermax, and Cyril Shroff, managing partner of law firm Cyril Amarchand Mangaldas.