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The upcoming budget should provide fairly substantial relief to individual taxpayers in terms of increasing the income tax slabs, Alok B Shriram, President, PHDCCI has said.
This should be done so that more disposable income is available in the hands of individual taxpayers and this could push up demand, Shriram told Business Line in an interview.
The budget should go the extra mile in reducing transaction costs for businesses and move forward on the much awaited Goods and services tax (GST), he said.
The high transaction costs -- both in terms of time taken and the money involved -- are adversely impacting businesses in India, according to Shriram.
“The signalling time is all over. They (Modi-led Government) need to get action at the ground level and implement the difficult reforms”, he said.
They have to take radical decisions on the time taken for paper work and permissions.
The new Government has to cut down on human interactions so that there is no arbitrariness or discretions at the department level, Shriram added.
Shriram -- who took over as PHDCCI President in December last year -- suggested that in the worst case the Government should convene a joint session of Parliament to push through the reforms.
“The country cannot stop functioning”
They must bring in GST — it will ensure seamless trade, lower transaction costs and incidentally lower leakages within the system.
There is also a need to improve the power situation as power is the basic food of industry.
“They are getting some handle on power generation. They must now sort out evacuation and distribution issues”.
COMPANY LAW
Shriram felt that the new company law - enacted in 2013 - requires several rounds of “overhaul” as several anomalies need to be still addressed.
One issue is the fact that it treats small, medium and large companies on same footing.
“To expect, small and medium sized companies to follow the same level of compliance as large companies is going to cause huge burden on mid-sized entities. Some may collapse under it”.
SUPPORT MSMEs
The budget should also focus on creating new dedicated companies (Non-banking) to finance small and medium sized companies in India.
“The Government should put more money into this and create NBFCs focused on MSME financing. Give these new NBFCs to professionals for them to run. Have rules and regulations focused on MSMEs”.
Today a mainstream bank is not giving the necessary support to MSMEs, he said.
NEW GDP NUMBERS
Shriram felt that one should not get too ecstatic over the new GDP estimates (after base year revision and change in measurement concept to gross value added)
“Even to stand still, we need 8-9 per cent growth rate. At 7 per cent, it is not good situation. This is not enough for us. We need 9-10 per cent GDP growth”
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