Recent reforms have boosted country’s image: Adi Godrej

17 Dec,2012

By Rasul Bailay


Adi Godrej

Adi Godrej, president of Confederation of Indian Industry and chairman of Godrej Group, says India’s recent reforms initiatives have changed the perception of the country among global investors as well as local businesses for the better.


“The mood in the country and outside is much better than six months ago and I am optimistic if we are able to get some more reforms through, then 2013-14 will be a different year from 2012-13,” Mr Godrej said in an interview on Saturday.


The Union Government recently initiated a slew of reforms measures that included allowing foreign direct investment in multi-brand retail, civil aviation, power trading and broadcasting. Bills on increasing FDI limit in banking and insurance firms are before Parliament.


Mr Godrej suggested that Asia’s third-largest economy should make further efforts to boost foreign investments and help create the right perception needed to attract overseas capital even as he dismissed the recent outcry against FDI in multibrand retail as political “rhetoric”.


“In my view there will be some rhetoric, especially in Parliament. The important thing is the final result,” he said. Mr Godrej singled out the uniform goods and services tax to be the biggest boost for reforms as well as for the overall economic growth.


“The most important reform is goods and services tax and that will add 1.5 to 2 percentage points to the GDP growth,” he said. He said the differences between various states and the union ministry of finance have been mostly ironed out.


“Earlier they (the various states) had underestimated the benefits they would be getting. Now there is a better consensus on it and we are hopeful it should go forward and it is the single most important reform to get growth accelerated in our country,” Mr Godrej said.


He also lauded the recently constituted Cabinet Committee of Investment, which will be headed by the Prime Minister. The panel would not only help resolve inter-ministerial differences on issues but would also try fast-track reforms and projects.


“This is a framework for things to get done. I am not saying it will solve all our problems but it’s good development,” Mr Godrej said.


The CII president also advocated lowering of interest rates and said there is direct correlation between high lending rates and the slowing economy and the pressure it exerted on the rupee. He said lowering interest rates could not only help stoke growth but would also help contain inflation.


“In Turkey, there was a similar situation. They reduced interest rates and inflation came down. So we have to have some creative solutions to the present problem,” he said.


Source:The Economic Times

Copyright © 2012, Bennett, Coleman & Co. Ltd. All Rights Reserved


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