Indian exports have not picked up despite a revival in the global economy and the main challenge is the higher logistics costs industry players have to contend with, combined with the protectionist streak that is taking hold in developed countries like the U. S., said Piruz Khambatta, Rasna International Private Limited’s chairman and managing director. Mr. Khambatta, who recently took over as the chairman of the Western Region of Confederation of Indian Industry (CII), spoke on the top concerns for industry in 2018-19.
TFT : Is the industry now out of the woods when it comes to problems that arose from the transition to the new indirect tax system of Goods and Services Tax?
PK : No. There are several issues which the government must address at the earliest. A lot of States had provisions
for VAT (value-added tax) and excise refunds to the industry, which have been halted since the introduction of
the Goods and Services Tax (GST). Now, they are not giving such refunds and industry is unhappy. A tax refund policy has been announced for the North-east. The industry now needs clarity as to what would happen to the past refunds. The exporters are also not happy because of the delay in refunds. Theirs is a cyclical business and they need that money (to keep up operations). Besides, there are a lot of anomalies in the tax rates and these must be rationalized. The small and medium enterprises (SMEs) are facing big problems in augmenting IT infrastructure to be tax-compliant.
TFT :The U.S. is talking about imposing trade restrictions on India and other exporters. How will that affect our exports?
PK : It is unfortunate that the proponents of free trade are now putting up trade barriers. Over the years, India has reduced import duties from 30% to 40% in the past, to as low as 5%. What more can be done? It is strange that the US is talking like this today to protect its domestic industry. India’s exports are declining and we are unable to capitalize at a time when the global economy is reviving. The fact is that we are not competitive in the international market. This is because our logistics costs are very high. Now the main priority is to reduce logistics costs and the government is working towards it. Besides, the industry along with the Government is working to broaden the
exports basket in a focused manner.
TFT :There have been some major cases of banking fraud and alleged breaches of corporate governance norms in banks as well as corporates, in recent weeks. How does one deal with such situations?
PK : See what happened in the 2G scam. So I would not like to comment on individual cases. We at CII have high
standards and are making sure that all our members sign a code of conduct. This will go a long way in adhering to corporate governance standards. In the past few years, we have not seen adequate growth in jobs, which was a
major pitch of the ruling BJP party during its Lok Sabha electoral campaign. When do you think job creation will pick up? Private investment is still to pick up to spur economic growth… At CII, we are providing an emphasis
on skill development for creation of jobs. We are undertaking various programs to achieve this objective. CII recognizes that the country’s biggest expectation from industry is employment generation. The focus will be to support development of SMEs through B2B meets, delegations, exhibitions, specific webinars and mentoring sessions so that more jobs are created. Supporting Make in India with a quest to substitute imports and spur exports is another area of focus. This will boost employment generation. Job fairs will be organised across the region to connect corporates with job seekers and there will be a special initiative to promote employment of specially-abled
persons. A special focus will also be laid on skill development and promoting industry-academia linkages. We are also pursuing greater affirmative action. As far as private investment is concerned, it has started happening.
TFT : The CII’s Western Region has adopted the theme ‘ARISE’ for the year 2018-19. What does this aspire to achieve?
PK : The term ‘ARISE’ stands for: A – Accountability on Corporate Governance; R – Reforms; I – Innovation; S –
Sustainability; and E – Employment. The theme calls out to members and to the larger industry to “ARISE for the Nation”. The accountability on the corporate governance front has been in the limelight like never before in the backdrop of some of the recent scams. We believe that it is important to become an ‘Accountable Nation’ before becoming a ‘Developed Nation’. For this, we plan to organise programs to sensitise our members by sharing
information on best ethical practices. Round-table meetings and awareness sessions on corporate governance, ethics
and disclosures, will be part of Council meetings in the region. Reforms are the biggest need of the industry today, as they have the potential to enhance the business environment and transform India into the most preferred investment destination in the world. To boost policy reforms, we plan to engage in policy advocacy by facilitating discussions on sectoral issues at its Council meetings, organise policy roundtables, engage in policy formulations and steer various GSTrelated initiatives.
TFT : Many Mumbai start-ups are moving to Bengaluru for brighter prospects. Does CII have a plan for start-ups in the region?
PK : Innovation is what distinguishes the ordinary from the excellent. To promote innovation as a way of life
among industries in the region, we plan to organize workshops and sessions on Industry 4.0 to make members aware
about advanced technologies like 3D Printing, AI, Blockchain and Robotics among others. Competitions, missions and delegations are also being planned to showcase best innovative practices. Industry-academia linkages will be
facilitated to promote innovation in the formative stages. A dedicated Taskforce on Innovation & Start-ups and Mentors’ Pool will help encourage and support start-ups. In addition, CII IP Facilitation Centre will also help member companies file patents to support innovation.
TFT : Is there any action proposed to quell environmental concerns that are often stalling development and investment projects?
PK : Given the rapid depletion of resources and degradation in environment, sustainability has become the buzzword in industry circles today. The CII’s Western Regional Council believes that all development should be sustainable in nature. To promote sustainable practices, we will help connect members to various centres of excellence on green buildings, food & agriculture, sustainability and water. The region will also focus on promoting green technologies in manufacturing and infrastructure development. In addition to missions and delegations to promote best practices, we will specifically focus on sectors like renewable energy, waste management, cleanliness, charging infrastructure for electric vehicle and water among others.