Selco India MD H. Harish Hande
Most of the reforms seem skewed towards larger corporates
, and the way we are going about with our reform process, it appears as if the poor will only be used as labourers. There is very little being done to encourage the poor to move towards creating an enterprise.In our business (renewable energy)
we are not asking for capital subsidy but a good end user financing. If the government does want to provide subsidies to the poor, it should subsidise the rate of interest.
There are so many loan mechanisms in the banking system which the poor should get but cannot access; we need reforms that make this possible. Neither targets are set for local banks nor strictures issued to them or other lending agencies that fail on these counts.
While measures like increasing foreign direct investment (FDI)
in certain sectors could be good for the economy
, we are still talking of steps that would have a direct impact only on 10-20 per cent of the population. The reforms not only lack breadth as they need to be across sectors, but more importantly they lack depth as well.
Access to funds is crucial for those persons who want to start small enterprises and are keen to expand them.
There is something called the DRI (differential rate of interest) scheme, where a poor person earning less than Rs 18,000 a year can get a loan at an interest of four per cent per annum.
The scheme is not being utilised properly.
Even if 50 per cent of the scheme fails, the country as a whole will not suffer because it will create enterprises that would boost business opportunities.
In a sector like renewable energy, there is little scope for innovation
. For instance, it is all tight-jacketed when it comes to product pricing and choice.
We also do not enjoy any tax breaks or tax incentives; we are taxed like any profit-making entity. Besides, what could be disturbing is that the end user, who replaces kerosene - which is subsidised and imported - with a solar lighting solution, pays tax because of VAT (value added tax) imposed in many states.
H. Harish Hande
MD, SELCO INDIA(As told to Business Today)