FICCI expects bold reform measures from Modi 2.0 for a higher growth trajectory

New Delhi: With the NDA government getting a bigger mandate in the Lok Sabha elections, the industry is expecting bold reform measures to overcome the existing challenges, including the rural distress and job-creation, and push the economy to a higher growth trajectory, FICCI President Sandip Somany said.

The six-key-point agenda

FICCI from its side has submitted a robust agenda for growth to the government comprising measures to address the challenges and improve the business environment, said Somany. The six key points of the agenda are passage of the pending Bills, announcement of policies (including E-commerce, Industry, Retail and E-pharmacy), simplification of GST, lowering of interest rates, addressing farm distress and creation of an eco-system that promotes employment.

‘Budget should focus on spurring investment’

“The focus of the government in the Budget has to be on spurring investment. Cost of doing business is very high in India and while there is a need for reducing the interest rate by at least 100-150 basis points, the corporate tax rate too must be cut for all the companies to 25 percent from the current 30 percent. There is also a need to review the MAT structure, which is too high.
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Further administrative simplification in the GST and other laws to improve the ease of doing business scenario is also required,” Somany said.

The issue of job creation

While stressing that the creation of adequate and quality jobs is one of the key challenges for the new government, Somany said that the government needs to “put in place a robust system for capturing the jobs data so that we have an accurate estimate of jobs that are being created industry-wise.”

We have about 10-12 million people joining the workforce every year and with a labour force participation rate of about 0.5 to 0.55, the country needs to create about 6-7 million jobs annually. If we account for the backlog of the unemployed, we possibly need to create as many as 8 million jobs annually, said the FICCI president.

‘Focus on new-age businesses’

“Along with the support of the MSME sector, the government must focus on the new age business like online aggregator services and applications like Ola, Uber, Zomato and Swiggy, and also the start-up domain for creation of more jobs. Also, labour flexibility has to be brought in,” Somany noted.

Once a strong backbone for supporting entrepreneurial ventures is in place along with the skilling and re-skilling ecosystem and a flexible hiring framework, pick up in investment will have a multiplier effect on job creation, and that is what the government should target, he added.

“Creation of a separate ministry for employment will help coordinate these efforts effectively.”