“We in the industry have high hopes riding on the Prime Minister, who as the country’s Finance Minister in early nineties rewrote India’s economic history by ushering in reforms,” said Rajkumar N Dhoot, President Assocham in a press statement.
They also felt that the global conditions, coupled with the perception of slow domestic policy actions had damaged the business environment, worsened by the international credit rating agencies.
Similarly, the draft guidelines on the General Anti-Avoidance Rules (GAAR), would at least give a platform for the issue to be debated threadbare.
“We would urge the government not to rush in. Instead, let the stakeholders- government, tax-payers, stock market, industry and even foreign players get into informed debates, before we get an acceptable view, win-win for all. Besides, the exercise will bring in the much-needed clarity on one of the most controversial issues,” said Mr Rajkumar N Dhoot, President Assocham.
The respondents said, while allowing foreign direct investment in multi-brand retail will not necessarily lead to flood of foreign funds, the decision will send a very positive signal among the global and domestic investors.
A clear majority in the survey, undertaken in the last few days, expects some definite actions in the areas of power sector, particularly with regard to fixing problems of fuel supply. An immediate action can be expected by taking a review of the GAAR provision and also push to the Direct Tax Code Bill (DTC) in the Monsoon session of Parliament.
Some easing of regime is also expected for the mutual fund industry, which has been marred by several problems, including those of product distribution after entry loads were done away with.
While the contentious matter of retrospective tax laws may not get solved fast, the CEOs expect the government to reach out to the investors to explain to them the rationale behind these laws.
As many as 72 per cent of the CEOs, who took part in the survey, said that the Prime Minister now has a great opportunity to set things right among the economic and infrastructure ministries like roads, power, coal and environment.
However, not many expected a major turnaround in civil aviation, the sector which is marred by large debts and near bankruptcy among some important players, it was felt.
The survey pointed out overwhelmingly that the sectors requiring urgent government and RBI attention are the real estate, housing, automobile and the banking.
The results of the survey showed that the industry players are expecting an immediate reversal in the interest rates. Terming the current interest rates as ultra high they said that these rates are causing a big imbalance in the economy and killing the demand in several labour-intensive sectors. The survey added that the current interest rates have huge implications for the employment.