'The private sector believes that some enablers in labour-intensive sectors like apparel, toys, tourism and media retail can unlock a lot of jobs.'
India needs to invest in growth while sticking to the fiscal glide path, Sanjiv Puri, president, Confederation of Indian Industry, said ahead of the discussions with the finance ministry.
Puri, in an interview with Ruchika Chitravanshi/Business Standard, said it was important to create a more resilient rural sector in the future.
What is your overall reading of the rural demand and is it a concern?
The rural demand issue has been there for some time but in the last quarter, companies have been starting to see green shoots of recovery with a good monsoon. We believe it will get better.
Food inflation would be more modest which, in turn, should lead to an easing of interest rates in the second half. That will also fuel demand.
India is growing at a time when most economies are under stress.
Because of all the supply chain disruptions, the geopolitical crisis and climate, and weather events, the cost of many things has gone up.
India is not insulated from the rest of the world.
However, India has been able to manage inflation much better.
The whole model of investment-led inclusive growth will have an impact on fueling consumption going forward.
It is equally important to understand what can be done to create a more resilient rural sector in the future.
What do you think can be done?
Agriculture productivity and agriculture resilience are important.
In agriculture, we're looking at reform, because this sector needs to be transformed.
Second, as far as the public capex is concerned, we are recommending a 25 per cent increase from the revised estimate.
That will provide the space to deploy additional resources for rural areas - housing, agriculture, warehousing, and irrigation.
It will give impetus to jobs in rural areas and fuel demand.
The third is to empower the rural population, particularly rural youth through education, skilling, and healthcare.
You mentioned a 25 per cent increase in public capex. When will the private sector be ready to do the heavy lifting as far as capex is concerned?
There are green shoots in private capex. It's a good trajectory and it will only strengthen going forward.
A lot of the other reforms in agriculture, land, labour, and the FTAs are a work in progress, and greater integration into global value chains -- all of these are going to provide further impetus.
Is a delay in the monsoon a concern?
There are some pockets here and there but the overall forecast is good. There's no reason for alarm.
The government has been talking about market reforms. Now that we have a coalition government, do you think we will be able to go ahead with all the reforms?
The case for reforms is validated by the experience of the past.
We had 8.2% GDP at a time when the world was stressed. This happened because of a lot of policy instruments that were deployed over the years.
What role do you think the private sector has to play in creating jobs?
The private sector has to create jobs. It is a responsibility.
The private sector believes that some enablers in labour-intensive sectors like apparel, toys, tourism, and media retail, can unlock a lot of jobs.
These sectors require more policy interventions.
We're suggesting an employment-linked scheme with some outcome metrics and infrastructure status for tourism, both at the Centre and the state level.
It is a great opportunity to launch a global campaign to promote India.
G20 was very well leveraged to showcase what India has to offer.
What are your broad expectations from the Budget?
Besides the 25 per cent increase in public capex, we are looking at green transition, mechanisms for funding green growth and adaptation, and a roadmap to enhance investments in health education skilling.
We are looking at simplification of direct taxes.
We are also recommending a three-tier GST structure, and a more inclusive GST to bring in petroleum, and real estate.
Even in customs, we are saying we should move to a system of three-tier customs duty - primary intermediates and finished goods.
Do you think there is room, because of the RBI dividend, to further bring down the FY25 fiscal deficit target from 5.1 per cent?
India has a trinity of priorities -- private investment for inclusive growth, investment for climate emergency and staying with the glide path.
We have to look at the priorities and therefore the resource requirements.
India does need to invest in growth. We should stay with the current glide path.
What can the government do for a ratings upgrade?
Rating upgrades should happen on their own merits. The reform process should continue and the fiscal glide path should be adhered to.
We've been lagging on divestment. What do you think will happen to such plans in a coalition government?
The government has taken a view that they will remain invested in certain strategic areas. Over a period of time, privatisation of two private banks has been announced.
We are recommending it should go through.
These things are not easy. Even Air India was not easy, but ultimately, it happened.
How receptive has the government been to industry suggestions?
The government has been quite open. They've been welcoming suggestions.
What is interesting for the industry is that last year the finance minister and the prime minister also pointed out that the private sector is a partner.
Feature Presentation: Aslam Hunani/Rediff.com
