GST must be extended to uncovered sectors: new CII chief

Our Bureau New Delhi | Updated on April 12, 2018

New role Rakesh Bharti Mittal (right), President, CII, and Uday Kotak, President-Designate, addressing a press conference in New Delhi on Thursday   -  Kamal Narang

Voluntary corporate governance code for large enterprises, SMEs and financial sector in the works, says Rakesh Bharti Mittal

The Goods and Services Tax (GST) regime should be extended to hitherto uncovered sectors — electricity, real estate, alcohol and petroleum products, the new CII President Rakesh Bharti Mittal said.

Time is ripe for Corporate India to start investing in the economy to take advantage of the green shoots and the incipient signs of consumption recovery in rural India, Mittal said in his first press conference after assuming charge as CII President.

He also suggested that labour reforms need to be hastened if India is to become a $5-trillion economy by 2025.

Mittal said CII's theme for the current year during his Presidency will be ‘India RISE: Responsible, Inclusive, Sustainable, Entrepreneurial’.

He outlined 10 initiatives that CII would embark upon under the ‘India RISE’ theme. The initiatives include framing of voluntary corporate governance codes for large enterprises, small and medium enterprises and financial sector.

Also on the anvil is the launch of electric vehicles mission and promotion of green buildings.

The other initiatives planned are promotion of healthcare under Ayushman Bharat; six new model career centres to be set up to assist seamless connect of employment and employees; pilot project for strengthening Grameen Agricultural Markets(GrAM) and logistics corridor for perishables in southern States. Mittal said agriculture and rural economy are in distress and several reforms are needed to lift agriculture growth to 4 per cent levels.

He said farmer incomes can be doubled only when private investments pick up in agriculture sector. Uday Kotak, President-Designate, CII, said the progress of Insolvency and Bankruptcy Code (IBC) has been “very good”.

Tweaking IBC

One can soon expect some successful resolution with the 270-day period coming to an end for many companies in the RBI’s first list. He, however, noted that some “tweaking” of IBC may be necessary in the coming days to sort out several issues that have cropped up.

Down the road one will have to review the famous ‘Section 29A’ provision in the Code as it may end up forcing MSMEs into liquidation if enough resolution bids are not forthcoming, Kotak said.

The Section 29A forbids promoters from putting in resolution bids under the IBC. “This may have been the right approach in the initial days of IBC due to moral hazard issue, but going forward the situation for MSMEs may call for a review,” he added.

Kotak also stressed the need for rules of bidding to be on the lines of a prospectus — “It should be clearly stated what is the basis on which bids will be evaluated. There is need to put vigorous process in place on how bids will be evaluated — whether they have to be standardised or different from case to case,” he said.

Kotak also said the insolvency regulator IBBI was aware of the issues thrown up by IBC implementation and expressed hope that it would be addressed by tweaking the Code and the related regulations.

Published on April 12, 2018

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