“We are facing challenging headwinds in the economy and everyone acknowledges that. But the current environment where the government is willing to listen to the industry is very encouraging,” CII president Vikram Kirloskar said during an interaction with ET.
The government must focus on increasing infrastructure spending for growth to pick up, and it is one of the key areas for the industry to remain bullish about India’s growth story, he said. “I think they (the government) want to remove the knots in the game,” Kirloskar said, hailing the government’s approach to listen to suggestions from stakeholders.
He added that at the industry’s customary meeting with finance minister Nirmala Sitharaman, CII talked about lowering taxation on equity capital. “We did not talk about personal income taxes. It’s a wrong time, I think, to talk about personal income tax. I think it (the government) should focus on some of the more important issues right now.”
He said the automobile and capital goods industries were in bad shape, but the technology sector was taking off. “About telecom, we need three-four strong competitors in the sector and the government should relook at how they can take care of that,” Kirloskar said.
He said that the auto sector has been worst hit by the slowdown this year and nobody could hazard a guess when things would pick up. Difficulty in getting retail loans and the impending shift in fuel norms from BS-IV to BS-VI from April have added to the woes of the industry, Kirloskar said. “I think increase in axle load and increase in efficiency of transport after GST have both contributed to the truck sales coming down.”
Referring to the voluntary vehicle scrappage policy, Kirloskar suggested the need to find a way to incentivise car owners to scrap their vehicles early. He said that while the government was not in a position to incentivise, the auto industry too could not roll out freebies. “The auto industry barely makes any profit now. No industry can develop new products and invest in infrastructure unless they are making profit.”
The CII chief strongly voiced against India signing any free trade agreement that compromises the interests of the country. “We should be firm on what our FTA requirement is. If we don’t get them, if it doesn’t take care of India’s issues, (then we) shouldn’t do it, but look at the countries where there is an export potential. The US and Europe are the main ones,” he said.