Industry leaders have sought tax rationalisation, a package for non-banking finance companies (NBFCs), faster transmission of policy rate cuts and relief from harsh penal provisions introduced in the Companies Act for noncompliance with corporate social responsibility (CSR).
“It was decided that the government is going to take action very soon to revive the industry. It is a matter of sentiment. We got positive feedback from the finance minister,” said Sajjan Jindal, chairman, JSW Group.
Sitharaman is meeting industry representatives, having interacted with those from public and private banks, micro, small & medium enterprises (MSMEs) and automobiles sector, so far. She will be meeting representatives of the capital markets on Friday, and real estate on Sunday. “We are getting inputs from various sectors and trying to respond so confidence of those sectors is restored,” the minister had said after her meeting with bankers on Monday.
Core sector growth slumped to its lowest in more than four years in June and auto sales touched new lows, prompting companies to cut production.
Thursday’s meeting was attended by Wipro chairman Rishad Premji, ITC chairman Sanjiv Puri, Sun Pharma managing director Dilip Shanghvi and Apollo Hospitals managing director Suneeta Reddy. Jindal said the industry captains raised issues troubling sectors such as steel, NBFCs and automobiles.
Piramal Enterprises chairman Ajay Piramal said the reluctance of banks to lend to the industry was also brought to the government’s notice. “It is not that there was a lack of liquidity in banks, but lending was not taking place. There is stress on the economy as far as NBFC sector is concerned,” he said after the meeting, adding that the NBFC issue was also impacting sectors such as auto, home loan, and MSMEs. “I am told that there will be action soon. So, we will wait for that.”
Sitharaman also assured that penal provisions concerning noncompliance with CSR spending norms under the companies law would not be pursued. Piramal said the industry demanded that oversight in CSR spending should not result in any imprisonment.
Confederation of Indian Industries vice-president TV Narendran said the government sought views on ways to further stimulate the country’s economic growth. “Across the board, we discussed key issues,” he said adding that the slowdown in the auto industry would have an implication on the steel sector too.
Former president of the Federation of Indian Chambers of Commerce and Industry, Jyotsna Suri, said interest rates cuts should be passed on to borrowers.
Associated Chambers of Commerce and Industry of India president BK Goenka sought a stimulus package to kickstart investment cycle in the economy. With the current slowdown in the global and domestic market, there is a for quick-fix solutions, he said.
Assocham, in its observations to the finance minister, said there is need for rationalisation in the category of goods falling under 28% goods and services tax.
There are still 33 items in the highest slab. “It is recommended that the rate of other goods falling under such categories such as cement, consumer durables, automobiles, including parts thereof, etc should be reduced to 18%,” said Goenka.