We need fewer laws, better governance to kickstart economy: Venu Srinivasan

Q&A with TVS Motor Chairman and former president, CII

TVS Motor Chairman Venu Srinivasan in an interview with T E Narasimhan discusses the Modi government's performance so far and expectations for the upcoming Budget. Edited excerpts:

How do you rate Modi government's performance so far?

They have showed the intent to kickstart the economy. A change can't be brought in six months, we should give the government atleast three years before judging them.

The last budget was a continuation of the previous budget. But this budget will be important. The interest in India is the highest in years and we should tap it. 

Are you optimistic about the Indian economy?

Next year will be a better year and the year after that will be even better as the investment pipeline recovers.

What steps should the government take to spur economic recovery?

The first thing is fiscal discipline. Both our current account deficit and fiscal deficit were at highs, but thanks to government's measures and falling oil prices these have now come down. 

The government needs to sort out coal linkages for power plants. Around 2.4 lakh crore of investments are held up because of this issue. Companies have lost interest in the PPP model because it is so complicated. The Prevention of Corruption Act also dissuades officials from taking decisions.

There is a lot of money waiting to come into India if the government makes it easy for these firms. We need fewer laws, better governance and better enforcement of laws. Because of one Satyam case, a company law is passed which is difficult to comply with. The Satyam case shouldn't have happened but there were enough laws without the addition of a new one. 

The government needs to bring our governance in line with international norms instead of adding new laws. The aim should be to be among the top 50 countries with regards to ease of doing business. 

But while doing business in India is not very easy, it is not as difficult either. Companies like Hyundai have proven that. 

What are your expectations from the Budget?

We want to see the steps the government takes on infrastructure, investments and ease of doing business. We are hoping that it will not be limited to taxation.

Your view on interest rates?

It will soften. RBI has been conservative but they are the best judge. I think making that announcement on repo rate was correct. Inflation has also hit the lowest in five months.