Spate of recent probes against cos bad for industry: Ficci president

The slew of recent investigations against corporates does not bode well for the Indian industry, especially at a time when confidence has begun to return in the economy, the new Ficci President Sidharth Birla said Tuesday.

‘I think these developments are not good for industry or anybody else let alone investors. Reopening of age-old cases shatters confidence. Today it is CBI tomorrow it could be any other department,” Birla told Deccan Herald during an interaction. He was reacting to the news of preliminary enquiries against Vedanta Group in connection with alleged irregularities in the disinvestment of Hindustan Zinc (HZL) during the NDA regime 11 years ago.

Birla, who is also chairman of Xpro India, sees the Indian economy recovering from the low-growth period on the back of some commendable job done by the government in the past five months when the project clearance got accelerated but India still has to catch up with pace and implementation remains a hurdle.

“It is less of  policy paralysis. I say it has more to do with paralysis after the policy,” he said.Birla feels inflation is a blot coming in the way of overall economic growth and it can be removed only through the efforts of both the Centre and states. Monetary policy has a role in correcting inflation and anchoring inflationary expectations but when inflation driven by food articles, it is the sole responsibility of the government to enhance supple side response.

On the major pending economic reforms such as Goods and Services Tax and Direct Tax Code, which have been dragging for several years, he says the government should expedite such reforms which are in the benefit of everyone, but does not see the DTC coming before 2015.

“Whichever government comes to power, the next Budget will be passed only in July next year and even if they take up the DTC as their only priority, I don’t see it coming before the next budget,” Birla said.