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Public Investment, Divestment Should Continue: Harshavardhan Neotia

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Public Investment, Divestment Should Continue: Harshavardhan Neotia
Harshavardhan Neotia, president of industry body FICCI spoke to NDTV Profit about the economy and private sector ahead of the Union Budget.

Here are the edited excerpts:

Why has growth continued to be sluggish?

FICCI has maintained that we should be able to improve our growth. We have headwinds in the international economy and things are looking pretty gloomy there, but on the back of public expenditure and money reaching the ground, the various reform measures that have been taken in last 1.5 years...all off that should result in improved performance as far as India is concerned.

Should the government increase public investment?

Primarily, we feel that they should keep up public expenditure. Money that is going to the ground should have multiplier effect. It is also important to moderate interest rates, RBI has done its bit, but the flow of reduced inter rates to corporates/consumers is yet to happen. Disinvestment should continue, banks need to be recapitalized and they should be allowed to access markets. We are looking at pro-growth agenda and continue with reforms that government has taken in all earnestness.

What is your view on GST?

It has been much talked about and one of the most important issues on the table. We are hopeful of a resolution in a few months.

What do you have to say about tax stability?

The government has announced that they will reduce corporate tax from 30 per cent to 25 per cent and take back some of the exemptions. We are only suggesting a roadmap for the same be spelled out so that corporates can plan their strategy accordingly.

Are start-ups a mere promise or reality?

It is a worthwhile initiative. Many young people are going to become a part of the job market, but many jobs are not available in regular businesses. They have to look at entrepreneurial activity. The whole idea is to create an ecosystem and enthusiasm for entrepreneurial activity.

Are there signs of a pick-up in private sector investment?

India is the brightest spot in the world and there is no doubt that private sector will be keen to invest in the country. The issue is everyone has built in more capacity than demand. Over the last 2-4 years, there has been no new capacity. The other issue is interest cost and we are hoping that it will moderate over time.

Why are exports subdued?

We need to be conscious of this problem. China is slowing down and that will be major repercussion all over the world including India. I do feel that it's an area of concern but it's not alarming yet.


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