'India's economic progress not satisfactory at all'

The economy is not doing as good as it was expected and the pace of reforms has slowed down, industry body Confederation of Indian Industry's president Sumit Mazumder said on Tuesday.

"It (the economy) should have done a lot better.

“It can do a lot better.

“A reform like the Goods and Services Tax would give the whole industry such a psychological boost that you would see a rapid pack of pick up in the economy," the CII President told PTI in an interview.

Asked whether there was a slowdown in the reforms over the last few months, Mazumder said: "There is a slowdown but the reforms are still going through. So, it is not as if the reforms have totally stopped".

He said the ‘pace of reforms will pick up once Parliament knows how to function’.

On GST logjam, he said, "GST has been a huge disappointment because everybody recognises the benefits of GST, on how the GDP will be impacted positively and ease of doing business will go up by quite a few notches. . .

"This logjam in Parliament has been a very big disappointment and sometimes you have got to draw a line between politics and what is good for the country."

The proposed Goods and Services Tax law that will subsume all indirect taxes like excise duty, service tax and sales tax into one uniform rate, is stuck in the Rajya Sabha where the ruling National Democratic Alliance government lacks majority.

The Opposition Congress is demanding three major changes in the bill and stalled the passage of the Constitution Amendment Bill in the last two sessions, derailing government's plan to roll out GST from April 1, 2016.

Sharing the wishlist for the Budget, Mazumder said a major thrust is required by the government to stimulate rural demand and boost infrastructure development.

He also urged that the phased corporate tax reduction to 25 per cent from the prevailing 30 per cent be done in tandem with removal of allowances.

"We would like to see him take some initiatives where demand gets a stimulation because that is a major concern right now.

"We would request that reduction of corporate tax and removal of allowances be done in tandem.

"We would like to see continuation of investments that are being made by the government right now and by the PSUs.

“However, the fiscal deficit must be maintained, that should not be sacrificed and one of the ways to do it would be through disinvestment. We want to see a lot more impetus on infrastructure and construction," Mazumder said.

The industry is looking forward to lower interest rates,  he said, but added that he does not expect any more reduction in interest rates in the current fiscal because the rupee is not performing well.

"We won't see any big bang reduction in interest rates but it will be in small increments like last year," he said.

The CII President also pointed out that steps taken towards "ease of doing business have been translated onto the ground".

The image is used for representational purpose only. Photograph: Reuters