Mr. Pankaj Patel just appointed as new president of industry body FICCI.
Mr. Pankaj Patel spearheads Zydus Cadila, an innovation-driven global healthcare company.
Mr. Patel is the Chairman of the Board of Governors and Society, IIM, Udaipur and IIT, Bhubaneswar. He is also on the Board of IIM-Ahmedabad.
He also officiates on the Board of various educational institutes like the Ahmedabad University, Narsee Monjee Institute of Management Studies, the Gujarat Law Society, Nirma University etc.
He is the Executive Chairman, Vice President and Trustee of the Gujarat Cancer Society and Chairman of the Gujarat Cancer and Research Institute, a Regional Cancer Centre and one of the largest cancer centres of India, reaching out to the needy and underprivileged cancer patients. Southdelhinews.com ‘s Ajay Singh spoke to him on various issues. main points for our readers as follows…………….
Question: What are your expectations on GST rollout?
Recently at FICCI’s 89th Annual General Meeting, Hon’ble Finance Minister of India, Mr. Arun Jaitley mentioned that In the case of GST, 10 major decisions have already been taken by the GST Council and all of these have been by consensus. There are one or two issues with regard to cross empowerment of Centre and states and which will be amicably solved.
The current mode of taxation will continue till and so the range of timings for GST to be implemented will be between 1 April, 2017 and 16 September, 2017 – the earlier this is introduced, the better it is. Since GST is a transactional tax, it can be introduced at any time of the year unlike the income tax. FICCI is looking forward to its introduction in 2017.
Question: What are the expectations from the Union Budget on the issue of direct taxes?
The budget will offer the government a good opportunity to outline steps to strengthen growth in the economy and come out of the negative shock resulting from demonetization. We feel that there is strong case of lowering the taxation rates as well as widening the tax slabs. This would help to improve the disposable income and spur discretionary spending. Likewise, a significant cut in the corporate tax rates would add to the investable surplus of the companies and support capital formation. Lowering of tax rates will also improve compliance.
Question: 2 months after demonetisation was announced, how do you think the policy has played out?
The announcement to demonetize high value currency notes was a profound economic move aimed at addressing the issue of black money, curbing counterfeit currency and chocking funds availability for illegal activities. The move clearly highlights the strong resolve of the government to address the issue of corruption at its roots.
FICCI is of the view that this move by the government will yield several positive results in the medium to long term. Of course over the last few weeks, as we go through the transition period, there has been some disruption in economic activity especially in segments of the informal economy that are heavily dependent on cash. However, the government has been swift in its response and introduced several measures to ease out the difficulties.
One must remember that India is a very resilient economy and the support this move has got from the people is exemplary. The speed with which people are embracing the digital modes of payment is an indication of this resilience. FICCI also is working with its membership across the country to sensitize them and build their capacity to adopt digital modes of payment and receipt.
Question: What has been the impact of demonetization on the economy and growth and what is the expected impact on GDP growth as a consequence?
The demonetization move of the Government was a bold one. Given that there is no precedence to the kind of demonetization which we are witnessing and even economic theory has little to offer, it may be difficult to quantify the overall impact on GDP growth. One can only say with certainty once the actual numbers are out.
Yes, some segments of trade and industry have been hit because of the currency squeeze. Retail trade, hospitality, tourism, gems and jewellery have reported a dip in business. Even sectors like automobiles and consumer goods have seen a drop in demand especially in rural areas. However, as I said earlier, during the transition period this was expected and our sense is that once the re-monetization phase is complete and currency is back in circulation, GDP growth will get energized and we would see recovery.
Question: How is trade and industry responding to the new environment?
If we look at the impact on trade and industry following this move, then we see two clear trends emerging. First, there has been a temporary setback in levels of economic activity in certain segments of the economy, particularly those in the informal sector and where dependence on cash is high. Second, there is a move towards drawing out plans with defined timelines to move over to digital modes of payments in all transactions involving different stakeholders in the value chain. Many of our members have reported that they were either on the digital mode even before this happened or have started the on-boarding process with engagement of their employees, suppliers and other vendors.
FICCI is of the view that the benefits of a less cash economy are far too many and hence going digital will have to be the new normal for all segments of industry and trade.
Question: What are your expectations on the direction of the Budget?
The forthcoming budget is being looked upon with great anticipation and it is hoped that the Government will continue to give further direction on reforms.
The Government has already announced a slew of incentives for promoting digital payments. We look forward to the adoption of a mission mode approach to enable creation of digital architecture wide and deep across the country, especially through speeding up implementation of National Optic Fibre Network (NOFN).
Further, driving growth and job creation should remain the key priorities and thrust on infrastructure should continue. The Government may consider launching funds similar to the National Investment and Infrastructure Fund (NIIF) with other countries as co-investors. The Government could also encourage States to sign ‘State Support Agreements’ for large projects to aid timely implementation of such projects.
The budget must also include measures to drive consumption. The government should particularly work with banks to lower lending rates and provide easy finance to sectors like affordable housing.
In addition, the series of tax reforms (legislative as well as administrative) introduced over the past few years need to be carried forward in true spirit. Tax aggression should be done away with, and appropriate safeguards need to be put up to protect the taxpayers from abuse of powers by investigating tax authorities.
Lastly and most importantly, there is a need to push the innovation culture. Just like the ‘Make in India’ initiative that gave a great fillip to our manufacturing economy, India must have an overarching theme to contribute to the global innovation economy. A special emphasis on innovation that can spur new opportunities across industries, processes and business models that will catapult us to the next level is the need of the hour. We would like Union Budget 2017-18 to jumpstart initiatives that bring innovation to the forefront.
Question: Ficci along with the Rajasthan Government organized a very successful event GRAM in Jaipur recently. What is next ?
GRAM was the single largest agriculture meet in the country that attracted participation of 54500 farmers, 18900 visitors, International Delegations from 6 countries, 10 International experts and over 200 corporates. . A total of 38 MoUs were signed during GRAM, with an estimated investment of INR 4,400 crore and employment generation of over 47,000 people.
The display of numerous technological and product innovations in agriculture by private sector has been the core attraction of GRAM. Government of Rajasthan now plans to take these agriculture innovations to grassroots level and change the dynamics of farming for Rajasthan farmers including small holders. Now it is planned by the Rajasthan Govt. to organize GRAM at four regional headquarters strong in agriculture sector, in coming years with aim to disseminate agricultural innovations that deliver increased productivity per unit of resources, improve yields and support a sustainable future.
Rajasthan Government has embarked upon a series of reform measures to encourage investment in agriculture and agri-business Implementation of these MOU’s in coming year would definitely contribute in development of a robust agriculture sector in Rajasthan and lead to strong partnerships with agribusiness industry in realizing the broader vision of doubling farmer income by 2022.