CNBC-TV18’s Shereen Bhan and Latha Venkatesh caught up with some of the most influential voices in the country to get a sense of what is likely to happen as far as the economy is concerned, as far as the mood in the market is concerned and with key crucial reforms.
Below is an excerpt from the transcript by CNBC-TV18. Watch the full show here
Latha: What do you think India Inc wants to hear in the Budget itself? Is there something that can make you announce capex plans in whatever sector perhaps not in power where we are flooded with a lot of power or not in oil and gas either?
Mehta: I think the fact is that there are severe structural issues still to be contended within this economy. We have a financial problem and the government will have to consolidate the fisc and the Budget will have to look at ways in which they can cut expenditure whether it is by reducing subsidies, whether it is by cutting back on some of the wasteful expenses that have been incurred. So, that is one very important signal that India Inc will look at; are we able to actually contain the fiscal deficit.
The second thing that India Inc certainly will look for is will there be a signal to the Reserve Bank of India (RBI) for example with regard to the monetary policy? Now, there is this sort of tussle between inflation and growth and there is no doubt that we cannot have sustained high growth if we are living in high inflation environment. At the same time there are severe supply side issues that have to be tackled and the question is whether or not inflation can only be addressed through the monetary instrument or whether we should actually look at a combination of monetary, fiscal and supply side instruments to tackle inflation and revive growth and also create jobs.
The third thing which India Inc would be looking for what is going to be done to encourage not just the manufacturing sector but also the micro, small and medium scale enterprises? The reason I say that is because this is what is required in order to create the jobs that have to be created to absorb the new entrants into the labour market. So, manufacturing sector is important but that is not going to be the only sector that can create jobs. So, India Inc will also be looking at that.
Finally, there is the issue that everyone has talked about which is business confidence. Is there going to be an affirmation that contracts will be respected, that there won’t be any arbitrary tax sort of charge against investors? The playing field will be leveled. This whole idea that there is this crony capitalism culture that was created over the last three years will that be contained because I do think that are some of the issues that have to come out in the Budget.
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