FICCI President Jyotsna Suri says that, unlike earlier, the industry body has only two demands from the finance minister for the Budget and that it is not seeking instant gratification. Excerpts from an interview with Business Today's Chitra Narayanan:
Q. What are your Budget expectations from the FM this year?
A. Every industry body and its associations have huge demands every single year. But every demand cannot be met. So this year we have taken a different approach. One day is, after all, not going to change anything. What we need are long-term, permanent solutions, and initiatives that are on-going 365 days.
This government has initiated some reforms already. They need to continue to do it. Coming to the Budget demand, when we went to meet the FM, I told him we are not making the typical demands. I am asking you to do just two things for us:
1) Put in place a non-adversarial tax regime. Currently, whether it is retrospective taxing, whether it is forceful unheard-of demands that come up, there's just too much litigation. And most of these demands get killed when they move into courts. Ironically, out of 100 cases, they (the government) will win only 10 or so, so their hit rate is very low.
2) Give us some relief on cost of capital. The borrowing rates are way too high.
Q- What about GST? If you combine state and central taxes it will still come to 27 per cent or so, won't it? What's an acceptable rate for you?
A- If you give us a 27 per cent combined, it's a non-starter. That just doesn't work for us. The GST that will get implemented in 2016 won't be the best of taxes. It will take two or three years of tweaking to put in place. If it is a good GST that gets implemented, it does not hit the population at large. And it will broaden the tax base, get more people in the tax net, and help increase our GDP.
World over, the UK started at 14 per cent to 15 per cent tax rate. Today, they are at 17 per cent. The US is also somewhere there. If the government can look at international standards, then that is something that will be well accepted by us. For us, anything between 15 and 18 per cent is workable. The battle is all with the states, who feel they will lose out. But it will be a temporary loss.
In a country like ours, we cannot think of instant gratification. It will have to be a long-term thing. If you are expecting to get a Bingo the moment it is implemented, it won't happen. And we are prepared for that.