As the Narendra Modi -led NDA Government nears its one-year anniversary, the broad consensus seems to be that this government means business. However, domestic industry continues to be in 'wait & watch mode'. Business Today's Shweta Punj spoke to Sumit Mazumdar, President, CII, on the accomplishments and failings of PM Modi's Government.
Q. If we were to look beyond the blitz of one year of the Modi Government , what has technically changed in the last one year?
A.I believe what the government has achieved in the first year is far more than what any government has achieved in the first year of governance. They have been able to create the right environment which is conducive to investments and growth, right foundation-I would much rather say that a foundation is being put in place for much more sustainable growth. I don't think the intention of the government was to bring in too many investments, but it was to put its house in order. Incidentally, $70 billion of investments including FDI and FII have come in the last one year.
There is a very big change in perception about India. There is a lot of interest internationally about India. I was there with the Prime Minister in China and in Germany-the display that India put up in Hannover would put any other country to shame. We were in hall number six and people were thronging to the hall to find out what is this India magic. In China, we talked a lot about imbalance of trade. The Chinese are recognising that it is important to set up manufacturing units here.
Q. But domestic industry continues to be wary and the investment cycle weak?
A. There is a lot of money stuck badly especially in infrastructure projects. In the last 4-5 years, with all the scams that were happening, the confidence of people were at the low ebb. But now people are beginning to see the change, but they want to be convinced that the change is for the long haul because any investment is for the long haul. Signs are looking positive. There is still a little bit of wait and watch, but that will change.
Q. Is there a different kind of policy paralysis, excessive centralised policy-making from the PMO?
A. I see in my interactions with the government is that it is willing to listen and take action. Not all ministers are accessible, but the important ministers are willing to listen.
Q. The allegation that the government seems to be fighting is that it is pro-corporate. Is it?
A. It is an unfair allegation-their recent announcements on the pension scheme, accident insurance, life insurance are definitely not pro corporate but for the common man. Eighty per cent of the workforce is in the unorganised sector and there is no safety net for them-according to the information I have picked up recently, eight crore people have signed up for the schemes. Even the Jan Dhan Yojana is a huge step.
Q. A year later, taxation woes continue to sting, be the MAT issue or the tax return forms.
A. There was a lot of noise about the tax return forms. The Finance Minister called for a meeting - he was extremely receptive and on the spot gave some decisions - like on the issue of foreigners working in India and declaring assets outside - the FM heard us and agreed that the government needs to rethink this. We also brought up harassment by tax inspectors; the Finance Minister said they will look at ways to minimise interface.