NEW DELHI: The new president of lobby group CII, Vikram Kirloskar, has said that he is striving to improve government-industry trust, which has hit an all-time low, resulting in higher compliance burden on businesses and an adverse impact on economic expansion.
“The Prime Minister has said ‘Sabka Vishwas’, an additional point, which I totally agree with. We need to improve industry-government and industry-society mutual trust and respect. Industry-government mutual trust may be at an all time low and this causes perhaps a lot of over-regulation and perhaps a loss of one or two percentage points in GDP growth,” Kirloskar, the vice-chairman of Toyota Kirloskar Motors, told TOI in an interview.
The auto industry veteran has also demanded a reduction in “very high” tax rates, which he said needed to be reduced to trigger investment. The CII chief said he is striving to improve governance standards in Indian companies with around 1,000 of the 10,000 members of the industry body signing the new code.
“We are persuading people if we follow the code we improve the trust with government and that is when regulations will come down. Let’s do clean business and let’s get the government to trust us,” he said but added that behavioural change takes time.
The new code has been signed by companies, which account for 70-80% of the revenues earned by CII members, but the chamber does not have the flexibility to cancel the membership of errant entities. Kirloskar also sought a distinction between habitual offenders and businesses that face genuine challenges from time to time. “There are business cycles, people may not do it intentionally,” he said.
While admitting that regulatory burden has reduced for large companies, the CII president said that there was a plethora of tax- and corporate law-related filings.
He suggested that one way out could be to clean up the taxation system by removing all exemptions available to the corporate sector and imposing a flat 18% corporation tax. “We are proposing that remove the exemptions. Our calculation is 18% corporate tax, zero exemptions, its revenue neutral,” Kirloskar said.