The Hindu Business Line : `Bet on transparency, better governance'

On Budget
Businesses too need a stable policy environment of 3-5 years to plan and grow.
This year the corporate sector had given the Budget the `thumbs up'.

STABLE BUSINESS environment needed: Mr V.A. George, President, India Cements Capital Ltd, addressing students on the Budget at a meet organised by BL Club in Chennai on Friday. Also seen are (from left) Mr V. Balaraman, Managing Director and CEO, Adrenalin e Systems Ltd, and Mr V. Ranganathan, Partner, Ernst & Young. — Bijoy Ghosh

Chennai , March 10

Industry and finance experts stressed the need for transparency and better governance if India has to sustain its growth. While the Budget for 2006-07 has left the industry optimistic, there are issues such as stable policies and quality of governance that need to be addressed, they said.

A group of experts from the finance and manufacturing sectors was addressing students on the Union Budget here on Friday at a meeting organised by the Business Line Club, an initiative to encourage industry-academia interface.

Mr V. Balaraman, MD & CEO, Adrenalin e Systems Ltd, felt that long-term policies were what the industry was looking for. The Budget as an annual exercise was characterised by "unnecessary hype." It takes four years to qualify to be a doctor or an engineer. Businesses too need a stable policy environment of 3-5 years to plan and grow.

This year the corporate sector had, however, given the Budget the `thumbs up' - an indication being the buoyant Sensex, he said. The Government had given a clear signal that the `country is pro-business.'

Mr V. Ranganathan, Partner, Ernst & Young, stressed the importance of improving the quality of governance. Apart from physical infrastructure, `governance infrastructure was lacking,' he said. Economic growth had been achieved independent of the annual Budget exercise. Except for the direction of reforms and liberalisation initiated in 1991 there had not been any major contribution to growth from policies, he said.

Mr V.A. George, President, India Cements Capital Ltd, said fiscal deficit and uncontrolled expenditure on administrative machinery were issues that could affect progress in the long term. Other concerns were dependence on imported oil - greater emphasis on public transport was needed for fuel conservation, he felt.

The Government needed to work on widening the tax base, including taxing agriculture income of the affluent farmers, he said.

The strongest asset was human resource. But employment had to be generated for this asset to be leveraged.

Mr G. Ramachandran, a financial consultant, said India's strength was in the size of its market, which attracted investments from abroad. Foreign Direct Investments were coming in to take advantage of the local market and to use the human resource to cater to markets abroad.

Private consumption was driving GDP growth and over the next decade would firmly drive growth and ensure flow of investment funds as India was seen as a destination to park capital, he said.

Around 600 students from various management schools, which are part of the BL Club, including 35 students from the Manakula Vinayagar College of Engineering, Pondicherry, participated in the discussion. The event was held in the Ethiraj College auditorium.

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