India needs to push GST, regulatory reforms: Swedish survey

Only 72% of companies indicated a favourable investment climate for the next 3 years as against 90% in 2014-15

India needs to push reforms in the area of taxation including Goods and Services Tax (GST) as well at in regulations to improve business sentiment that has dampened slightly in the last one year, a survey said on Friday.

According to the Business Climate Survey conducted by Swedish Chamber of Commerce in India along with the Embassy of Sweden, only 72 per cent of the companies indicated a favourable investment climate for the next three years as against 90 per cent in 2014-15.

"I am happy to note that despite slight dampening of the sentiment this year, companies continue to invest and expand their manufacturing and operations in India," Ambassador of Sweden to India Harald Sandberg said on the findings.

The survey captures the views of 141 Swedish companies which are operating in India.

"There are some obstacles still needing to be overcome, principally in the areas of taxation and regulations, so 2016 will be a critical year for implementing reforms," Swedish Chamber of Commerce Chairman Kandarp Singh said.

He said early roll out of the GST would be an important reform in India.

The constitution amendment bill to roll out GST is stuck in Rajya Sabha because stiff opposition by Congress party.

Singh said however that overall the sentiment remain positive and Swedish companies are still bullish about investing in India.

Further according to the survey 2015-16, the business community struggles with the same challenges as earlier years, related to doing business but the area of tax regulations and taxation rates is more emphasised this year.

"Labour laws in India are considered as a challenge by Swedish companies. Outdated laws and local interpretation, regulations regarding contractual workers and cumbersome handling of expatriates are some of the issues mentioned, across states and sectors," the survey said.

Speaking at the function, DIPP Secretary Amitabh Kant said the government is taking steps to make India one of the easiest place to do business.

"Our aim is to bring India in the top 30 in the World Bank's ease of doing business report," he said, adding that this year India has jumped 12 positions and ranked at 130th out of 189 countries.

Kant also invited Swedish firms to invest in India in sectors such as defence, railways and construction.

Government is also taking steps to make tax regime more predictable and stable, he added.