Here are five suggestions from me to kick-start economic growth in 2013.
• Pass the necessary constitutional amendment to bring the goods and services tax into effect. This move will address India’s macroeconomic problems such as fiscal deficit and inflation. Tax evasion will become very low and the gross domestic product growth rate would improve by about two percentage points, other things being equal.
• Activate the cabinet committee on investments to take quick decisions to clear the large number of projects held up for one reason or the other.
• Take special steps to ask all state governments to expeditiously clear all pending applications for property development in the country. The real estate sector is the largest single business sector in the country and has tremendous positive impact on many other sectors in the country.
• Continue the reform process which has begun well during the last quarter. By continuing the reform process, we need to attract much more foreign and Indian investment across the board. The reform process will help improve the perception of the country among international investors and thus attract foreign exchange, know-how and technology to the country. Foreign institutional investment would also increase considerably, helping the country to ease the current account deficit.
• The negative perceptions created by the introduction of retrospective amendments and GAAR (general anti-avoidance rules) need to be reversed. The retrospective amendments need to be done away with and GAAR should be suitably amended and deferred by at least three years.
If these changes are implemented, the economy could come back to an 8%-plus growth rate during 2013-14.
Adi Godrej, chairman, Godrej Industries Ltd and Godrej Consumer Products Ltd