Monitor inflation data on real time basis: ASSOCHAM

Inflation

-PV News Bureau

ASSOCHAM President Rana Kapoor stated that Prime Minister designate Narendra Modi and his team should hit the ground immediately after assuming office and for starters aim at taming decisively inflation by monitoring the CPI-WPI data the way sensex is monitored so that the debate of growth versus inflation is settled once and for all. Interest rates would then surely drop significantly.

Even as there are doubts over regular Monsoon this year, the country is estimated to be harvesting record foodgrain production of 264 million tonnes in 2014 with most of the essential items like rice, wheat, coarse cereals, oilseeds and sugar reaching new highs. “There is no issue of supply constraint, supply is in plenty. It is only a question of supply management which should be done in a control room type of environment, staying in constant touch with the state governments. Aggressive market interventions should be done for wheat, rice etc so that prices remain in check”, said Kapoor. Several line ministries under the PMO should be on constant vigil.

Besides, while the industry and financial markets have high expectations from Modi, “We need not always talk in terms of specific and micro issues as to how many subsidised LPG cylinders, should the government give or how frequently the government should raise the diesel prices… We should leave the micro-management to the government. Instead, we in the industry would rather expect the incoming government to focus on financial discipline (how it achieves should be left to it) and first rate governance efficiency in terms of reaching out to both citizens and industry …..There is no conflict of interests between the rights of common citizens and the industry, which unfortunately has been projected to be so,” ASSOCHAM President said.

He said it was time the industry and economists also realised that good economic reforms must also be people friendly so that they command a solid political support. “No amount of debate on reforms will work as long as they are politically not viable and saleable to the common people. He and she understand the language of mouth and we in the Indian industry would like to assure the NDA Government that our objective is common- make life of average Indian far better”.

It is for this objective that we expect Modi to involve all political parties, state chief ministers, industry, farmers, trade unions and civil society so that the projects of national importance like industrial corridor, railway freight corridor and mining rights , coal linkages are resolved in a time –bound manner. “While Modi has a reputation of being decisive, it would be unrealistic to expect him to step aside the genuine concerns from conflicting interests. The key lies in resolving them and moving ahead”.

Kapoor said while the industry has strong reservation on the new Land Acquisition Act, the immediate solution lies in the Centre and states teaming together and creating land banks which should be then allotted to the industry for manufacturing and infrastructure facilities. “As long as the process is transparent and the stakeholders like farmers are taken on board, there is no reason, things should stay muddled”.

The other immediate task which can be done along with the presentation of the full-fledged Budget next month should be to send a strong message that the tax regime would be clear-cut, non-discretionary to different interpretations and under no circumstances would be retrospective. Besides, the regime should assure long –term continuity so that the investors who want to commit billions of dollars should remain certain and assured upfront. “The policy risks which often lead to risks of judicial reviews and scrutinies have to be cut if not totally eliminated,” Kapoor said.

Making projections of GDP growth of over six per cent in the current fiscal, the ASSOCHAM President, who is also a well-respected banker as Yes Bank CEO and Managing Director, said the macro picture today looks better and is likely to improve further. “The concerns both on internal and external sector seem to be abating”, he said.

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