Predictable tax regime vital for Make in India, say business leaders
Executives discuss ease of doing business in India at National Competitiveness Forum
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Business News/ Politics / Policy/ Predictable tax regime vital for Make in India, say business leaders
New Delhi: Prime Minister Narendra Modi’s Make in India initiative may have generated a lot of buzz, but there are a host of issues that India needs to address if it wants to project itself as a manufacturing hub of the world.
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Is the initiative making progress? Are we making for the world or only for India? These and many more such questions were raised at the panel discussion held at the National Competitiveness Forum in Gurgaon on Friday.
Lack of clarity on India’s supply chain, regional production plans, export and import strategy, infrastructure strategy, mobility of labour and foreign investment strategy are the major roadblocks that need fixing even as the Narendra Modi-led National Democratic Alliance (NDA) government is trying to project India as a manufacturing hub, according to Michael Enright, strategy and international business professor at the University of Hong Kong. “China is quite clear on these parameters," Enright said. “India is a very, very important country. You have engineers who are world class. Your labour cost is an advantage. But when I come to India, these are the things that are missing."
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India has set for itself an ambitious target of increasing the contribution of manufacturing to 25% of gross domestic product (GDP) by 2025, from 16% now.
“You need to decide which markets are attractive and export to those markets. Exports are much more difficult than ever," Enright said.
A predictable tax regime, some panellists said, would help in promoting business in India.
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Nagendra Palle, chief executive officer (CEO), Mahindra First Choice Wheels, went to the extent of saying that even the proposed goods and services tax wouldn’t help unless there was centre-state compatibility.
“The public and the government should now focus not on who builds the cheapest but who can get the top quality at the best prices," said Nitin Prasad, managing director, Shell Lubricants India, an oil firm. Another problem, he added, was whether a contract signed by one government would be honoured by the next. “I don’t care about Modi 1, 2 or 3; what happens after that?"
Comparisons were drawn between the ease of doing business in India and the rest of the world. Commenting on this, Seshagiri Rao, CEO, JSW Steel, said, “Free trade agreements (FTAs) are being used to damage the domestic industry and our policy on these should be deliberated upon." He highlighted how the world is shifting to Mexico for production because of how the country has effectively utilized its FTAs, something India needs to achieve as well.
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