With Adi Godrej set to hand over the post of president of CII to Kris Gopalakrishnan, CNBC-TV18’s Shereen Bhan caught up with the two business leaders and asked them their views on the economis and the political scenario.
While Godrej feels that Budget pronouncements were clearly pro-growth, and there will be a turnaround, he adds that the ease of doing business in India is one aspect that needs to be worked on to attract inflows.
Even with political uncertainty prevailing, and foreign investors in a wait-and watch mode, Gopalakrishnan is optimistic that irrespective of which coalition comes back to power, the country will continue in the path of economic growth.
Q: What is your take on the economy and how does the way forward looks like?
Godrej: I do feel that there is a change coming about. I think that some of the reform measures announced in the recent past, I thought the Budget pronouncements were clearly pro-growth. I do feel there is a change taking place and there is a turnaround. So, I would say I don’t see any deceleration anymore. There will be an acceleration, the amount of acceleration to my mind would depend a lot on the further reform programme especially if we can get the goods and services tax (GST) implemented early we will come back to our high growth rate quite soon.
Q: How confident are you feeling? Even though the Prime Minister is trying to reach out to India Inc. saying that the reform agenda, the reform front will continue, but they do not have the numbers to put legislative action through. Are you confident that things like insurance, pension, Goods and Services Tax (GST), the Direct Taxes Code (DTC) Bill where the government requires numbers will be passed by parliament?
Godrej: It is only a part of what needs to be done. It needs legislative action. There are lot of other things need to be done. One of the things is ease of doing business. If the ease of doing business in India is improved which is really an executive action required India can move back to a reasonable growth rate quite fast.
Q: The pitch to investors both domestic and foreign was that we welcome your investments, we want you to invest, we cannot get back to the growth path without private sector investing, but the political dispensation and what it might be a couple of months down the line is clearly making foreigners very fearful. We do not know whether we are going to be faced with the prospects of an early election. How is the political quotient impacting investment decisions at this point in time?
Gopalakrishnan: Clearly in a democracy elections will happen periodically. This is not something which is unexpected. Maybe there is a concern about will it happen this year or maybe next year, but it is going to happen. In that sense it is not unexpected.
Q: You said that elections are an eventuality whether it happens this year or next year is the question, but the question also is what kind of political formation are we going to see? There is now a lot of talk about a third front. How does India Inc view what is likely to happen on the political front? Is a third front a reality or a mirage?
Gopalakrishnan: Coalitions are a reality. We have seen coalitions work over the last 20 years and we have also seen that over the last 20 years with different governments we have grown at 7.5-8 percent, with different governments from the different coalitions and in between we had actually a third front also for a brief period of time. So I am actually optimistic that irrespective of which coalition comes back to power we will continue in the path of economic growth.