Trust level between industry, govt should not be broken

Hyderabad: The Associated Chambers of Commerce and Industry of India (Assocham), a national industry body, cautioned the Centre that the trust levels between the government and industry should not be weakened or broken if it wanted new investments.

We have always been saying that we need to be very cautious. It takes much longer time to build something, but it can be demolished at one go - D S Rawat on govt deregistering 2 lakh companies

“Let the government do its job (on black money and shell companies), but the trust levels between the government and the industry should not be broken. If the trust level is weakened, new investments will not come in,” DS Rawat, Secretary General, Assocham, told The Hans India recently.

Asked about the central government deregistering two lakh shell companies, he said: “We have always been saying that we need to be very cautious. It takes much longer time to build something, but it can be demolished at one go”.

He further pointed out that shell companies were allowed. “It is not that all shell companies are fraud companies,” Rawat maintained. On economy, he said that the sluggish GDP growth was a concern. “We expect the country to log in around 6 per cent growth this year though we earlier forecast a growth of seven per cent,” he explained.

He attributed fall in the GDP growth numbers to slowdown in manufacturing sector and burgeoning non-performing assets (NPAs). “Everybody was hoping that the manufacturing sector would do well. But that has not happened. Importantly, majority of manufacturing units are running at 60-70 per cent capacity which is not a good sign,” Rawat said.

He further pointed out that interest rates had not come down to the desirable levels “The interest rates should be brought down further. At the same time, efforts should be channelled at finding a viable solution for NPAs so that banks would be able to offer more credit,” he said.

According to him, some of the sectors like real estate, power and infrastructure, are badly hit and still struggling. Rawat said India should grow at 9-10 per cent every year for next 20 years if it wanted to eradicate poverty and provide sufficient number of jobs to its population.

“For that to happen, our manufacturing sector should clock at least 13-15 per cent growth every year. If that doesn’t happen, more and more number of people will go jobless,” he said, adding, however, that there was no chance for the country to grow in double-digits in next three years.

Rawat said ease of doing business should improve for the country to attract more investment. “Given the global ranking now, we are not doing well on that front. Our rank should come down from the current 130 to at least 50,” he said. He also underlined the need for making the Indian industry much more competitive to spur exports.

On automation, Rawat said it would pose the biggest threat to jobs in the manufacturing sector. “Manufacturing sector has to embrace automation. This is no way-out. One robot can do the work of ten people. To tackle it, there is an urgent need to reskill existing workforce and re-orient the education system for future employees,” he said.