India’s economy is poised for sustained high economic growth in coming years, he said, while flagging another Covid-19 wave and the Russia-Ukraine as possible risks.
Sinha, who is chairman and managing director of ReNew Power, took charge as president of the industry body on Monday. Also, Ajay Singh, chairman and managing director of SpiceJet, took over as the new senior vice-president of Assocham.
“After Covid impacted economic activities for a year and a half, there has been a very nice bounce back and the expectation for next year’s GDP growth is about 7.5-8%. The number of reform measures that have been undertaken, robust exports and controlled inflation will ensure that the momentum is going to carry through into next year and beyond,” Sinha told ET in an interview.
Sinha, however, cautioned about the impact of the external environment on India’s growth story. “Having said that, of course, in all of these situations, there are always some risks to growth as well. One of those, of course, is the external environment, where there is some degree of uncertainty because a conflict is going on,” he said.
“The second thing is, of course, Covid itself. Hopefully we have seen the last of Covid but that is something we have to wait and watch,” he said, adding that the economy was in a very robust shape right at present and that he could foresee several years of sustained high growth.
Commenting on the delay in contract enforcement under infrastructure projects, Sinha vouched for setting up of a central contract-enforcement authority.
“There needs to be a central contract-enforcement authority, to be set up by the central government and staffed by people chosen by a central mechanism. This body should be able to make decisions relatively soon on judgements and issues like this,” he said.
Laying the roadmap for India to further improve on the ease of doing business ranking, Sinha said multiple GST rates and cumbersome taxation process were some issues that needed to be resolved to help India be in the 20s or 30s as against its current position. India was 63rd in the last report of the World Bank.
“Corporate taxation is a complicated and a cumbersome process. It needs to be simplified a little bit while focus should also be on speeding up the entire bankruptcy process,” he said.
On the GST front, India needs a more stable policy, he said. “There should be a flat GST for everything, and there should be no discretion of the GST Council on tweaking numbers up and down so that nobody has any doubt or any issue and there is a very predictable environment,” he added.
Talking about India’s dependence on China for solar equipment, Sinha said the government was now focusing on the security of equipment supply so there was no external dependence there.
“The government is very focused now on trying to indigenise and localise the supply chain, which is absolutely the right thing to do. It also gives India the opportunity of developing as an alternative manufacturing hub to China,” he said.
“Given this whole energy security issue, a lot of countries around the world would be happy to buy from India, rather than from China, because it’s good to have, for them also, some diversification,” he added.
Sinha also emphasised on the need for further tweaking the definition of MSMEs, enhanced credit provisioning for them and greater technological support to MSMEs to help them build up scale of operation.
“A lot of Indian MSMEs are basic assembly or simply basic product manufacturing. We need much more hi-tech development so that eventually over time it can lead to higher quality products and more R&D in the country as well,” he added.
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