What more reforms should the government undertake in the upcoming Budget after the recent goods and service tax (GST) rationalisation?
Both GST and income tax (I-T) reforms have improved spending. Today, people are spending a lot on health and education out of their own pockets. The government should increase its spending in these two sectors to put more money in the hands of consumers. Improving consumption demand, strengthening income has to be a focus area for the coming Budget. This would improve the market and economic growth. Job security is also an area of concern. There is no doubt that India is a bright spot in the world economy, but ease of doing business, simplification of processes, especially for the MSME sector, is essential.
What are your suggestions to boost the MSME sector?
The MSME sector needs ease of financing and flatted factories, where they can plug and play. The government should offer time-bound support to sectors hit by tariff shocks, such as textiles, gems & jewellery, and seafood. We should reduce power and input costs by expanding incentives for distributed renewable energy uptake by MSMEs, expand cash-flow–based lending using digital infrastructure and account aggregators. The government should provide targeted credit enhancement for non-banking financial companies (NBFCs) lending to MSMEs to reduce borrowing costs.
How is industry addressing concerns around the wage impact of the new labour codes?
Major concerns are around cost, which is the advantage India enjoys from the labour point of view. There is no question that more money needs to be spent on labour but it has to be rational else we may weaken our competitive advantage at a time when the labour cost in China has gone up. The wages should be increased in steps, not abruptly. It can be spread over a period of 3-4 years. We have given our inputs to the government on this.
Why is private sector investment still lagging?
Foreign investors want a smooth exit. India is an attractive market and everyone wants to come here, but we need simplification of processes, speed and agility of decision making. Refunds owed to industry should be sped up. Logistics and energy needs more work.
What role will the private sector play in job creation in the coming year?
Increased industrialisation will lead to more jobs. The trade deficit in some sectors is huge and that is an area of opportunity to localise. Skill will also be developed when private foreign direct investment (FDI) comes into the country. This is because they will not be bringing labour from outside but develop it in India.
Is artificial intelligence (AI) a big concern for industry?
India has made commendable progress on digitisation. Concerns are not as much around jobs as much as concern on quality of products, especially exports. AI has to be used for productivity improvement, not for job cuts. We should use AI to improve quality and cost as well as increase exports.
How is the industry dealing with the current global uncertainty and the US tariffs?
Most of the gross domestic product (GDP) is coming from domestic demand. This is certainly a disruption but it will normalise over time. The industry, too, is looking for newer markets. Things are improving in different sectors and segments. In many sectors, the time between development and delivery is long and it cannot be shut abruptly. So, exports are continuing. The MSME sector has got ease of credit but some subsidy in the form of loan for a year or so would be helpful.
 "Nirmal K Minda, President - ASSOCHAM and Chairman - UNO Minda")