The business confidence is turning for better within days of Prime Minister Manmohan Singh assuming charge of the Finance Ministry, an Assocham CEOs survey has said.
In a quick survey of 150 CEOs, there was a sense of renewed energy infusion in the economy among the industry and investors. “Over 80 percent of the CEOs polled felt that the Prime Minister, with the Finance Ministry under his charge, will now act without further loss of time, as he realises that the economy cannot afford any more indecisiveness,” it said.
Business environment in the country was damaged because of global conditions and perception of slow domestic policy actions which was exacerbated by global credit rating agencies, it said. It said the draft guidelines on the General Anti-Avoidance Rules (GAAR), would give a platform for the issue to be debated threadbare.
“We would urge the government not to rush in. Instead, let the stakeholders— government, tax-payers, stock market, industry and even foreign players get into informed debates, before we get an acceptable view, win-win for all,” said Assocham president Rajkumar N Dhoot.
However, allowing foreign direct investment in multi-brand retail will not lead to flood of foreign funds, it will send positive signal among investors, it said. The industry expects definite action in power sector, particularly with regard to fixing problems of fuel supply.
An immediate action can be expected by taking a review of the GAAR provision and also push to the Direct Tax Code Bill (DTC) in the Monsoon session of Parliament.
About 72 percent of the executives expects the PM has great to set things right in the economy and areas like roads, power, coal and environment. Real estate, housing, automobile and banking need urgent attention of the government and the Reserve Bank, it said. “We need immediate reversal in the interest rates. Ultra high rates of interest are causing a big imbalance in the economy and killing demand in several labour-intensive sectors,” Dhoot said.
The initial few moves in the Finance Ministry, supported by the Planning Commission Deputy Chairman Montek Singh Ahluwalia, send a clear signal of course correction, which is urgently required, it said.