Rituraj Sinha, Group COO of SIS India, says the private security and facilities management sector today offers a livelihood to more than eight million Indians.
Given the current challenges, what, in your opinion, would make for a good budget? What measures or proposals would you like to see?
These are tough times, so do not expect the finance minister to give any major incentives or reduce the revenue side. From a macro perspective, areas of focus could be:
• Reduction of the fiscal deficit: this is absolutely necessary to improve long-term investor sentiment and restart the investment cycle
• GST (goods and services tax): This would have a great impact in market integration and bolster industrial growth
• For individuals, increase in slabs of personal taxation due to high impact of inflation
Also, the budget should provide certainty and predictability about the regulatory regime and policy stance and its implementation. The environment over the last year has not been conducive for investment and unless investment grows, GDP (gross domestic product) will not grow. Without real GDP growth, the unemployment and the subsidy bill will continue to rise and the vicious cycle will continue.
The finance minister has a real challenge before him - he can bat to fix the India growth story or play for the upcoming general elections.
Given the constraints the government faces in raising revenue, do you see a case to increase income tax rates on the rich?
Increasing taxes on the rich is not going to provide any substantial gains to the exchequer. The tax collections are relatively higher today due to the reasonable tax rates and the general certainty and predictability about the rates. Most would agree that it is more important to widen the tax base and bring larger sections of the population that are either untaxed or under taxed within the tax regime.
If the budget does not meet expectations, do you fear that business sentiment would once again dip?
While the budget can give short-term cheer, business sentiment will not rise in a day and will actually pick up with an improvement in the demand and investment cycle. The budget is vital in terms of signalling the government's views and plans. Though business sentiment has looked up slightly over the last few months, there is still a general air of uncertainty prevailing in the country due to both political and fiscal reasons. While we do not expect the political air to clear up in a hurry, positive measures in the budget aimed at promoting both investment and employment should help to a large extent to continue the gradual recovery.
Specific to your sector, what could the current budget do to improve conditions?
The private security and facilities management sector today offers a livelihood to more than eight million Indians. This makes our sector among the largest employment generators in the country. Moreover, our sector creates jobs for the unskilled and economically weaker sections, which is the most critical piece of the unemployment-unemployability puzzle.
Keeping youth unemployed has multiple implications both on economic and geopolitical levels. With this in mind, vocational training/education should be given urgent importance in the budget so that the huge population of unskilled youth can be made productive. India urgently needs investment in vocational training infrastructure. There is also a need for government subsidy to implement skill development, as persons from weaker sections cannot foot training costs.
Also, currently there is no incentive to companies in the private security and facility management sector, which generates such large employment and conducts skill development for millions of Indians each year. There is a justifiable case for such companies to be given appropriate tax breaks as this is effectively equivalent to R&D cost - that is, development of human capital, which will give dividends to the country for a long time.
Which budget, in the recent past, do you remember as having been a good one?
None, as such.