'Things will start looking up by year-end'

Harsh Pati Singhania, managing director of JK Paper and director of JK Organisation, has taken over the presidentship of the Federation of Indian Chambers of Commerce and Industry (Ficci) at a time when the economy is going through a slowdown. However, in an interview with Sapna Dogra Singh, the 47-year-old Singhania expresses optimism that things would improve by the end of this year. Excerpts:

What is your agenda as the new Ficci president?
There is no special agenda, but the emphasis would be on finding ways and means to bring back growth by reviving demand. I am hopeful that by 2009-end, things will start looking up. The government needs to do more in infrastructure. All infrastructure projects that have been announced should be implemented expeditiously.

Any expectation from the Interim Budget?
Since this is a vote on account, I am not sure whether it will have any tax cuts and other decisions. However, I do hope the government will announce measures to induce growth.

Which sector is the worst affected by the current economic slowdown?
The small and medium enterprises (SMEs) sector is the worst hit, especially the export-oriented units. There are several issues facing the SME sector — interest rates are high for them and they are not getting working capital. There is enough liquidity in the system, but banks are not sanctioning loans due to lack of confidence.

The sector needs sops like lowering of interest rates, rescheduling of term loans and an interest subvention up to 4 per cent. Also, there is a need to create more linkages in the supply chain so that SMEs can work closely with big industries.

What is your take on the ‘Buy American’ clause in the US stimulus package?
I have not studied it in detail, but there are certain caveats. Therefore, it needs to be studied carefully to find whether it would harm countries like India. I doubt it would affect us that much as we are fearing. Such protectionist measures wouldn’t help anyone — neither the US nor India.

What do you think of the GDP projection of 7.1 per cent for 2008-09?
Well, it is a fairly decent number. We need to sustain this and achieve higher growth for this. Ficci is having dialogues with all major political parties to adopt a common agenda on issues like basic direction of growth, security and good governance.

What is Ficci doing for corporate governance post-Satyam?
Satyam is an aberration and one should not look at the Indian corporate sector with the same lens. The country’s corporate sector follows high corporate governance standards.

Ficci has a corporate governance committee in place and we keep holding seminars and meetings to educate people on corporate governance. Soon, we will initiate a survey along with accounting and auditing firm Grant Thornton to study the role of independent directors.