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Sumit Mazumder, new head of the Confederation of Indian Industry, talks to Deepak Patel & Indivjal Dhasmana on some current policy issues. Edited excerpts:
The Bill has become a contentious issue. Political opponents are trying to corner the government in this regard. But, you have spoken highly of it. How will you convince political parties and civil rights activists?
I have not worked with civil rights groups. We are an industry body; we work with political parties and states. If we can convince the states, we have got the problem solved. If we believe in the Bill and want it to happen, we will take every effort to ensure that it goes through.
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If you go through the details, it is not anti-farmer by any means. It really addresses farmers' issues. Its passage is essential. Our country is not going to move forward and develop unless industrialisation takes place. Every country in the world has moved from agriculture to industrialisation. We are perhaps the only country that moved a bit away from agriculture but straight to services. We gave industrialisation almost a miss. Industrialisation is very important for the growth of any country and that is why the Bill is very important. It has been drafted very carefully and is fair to all sides.
The income tax department has sent notices to foreign institutional investors on the Minimum Alternate Tax (MAT). Will it disturb the investment environment?
I don't think so. When you go to a country to do business, there are certain regulations. Despite all that, you find the country attractive enough to do business. Today, investors are seriously looking at India. What they are looking at is a smooth sailing while getting the permissions required. MAT is an issue but I don't think it is going to deter investment.
In the coal block auction, the government got a low price for one block and is thinking of investigation. Is it the right step?
Presumably, the whole allocation and auction process was a very transparent process. So, if it is a transparent process and there is something which looks abnormally wrong, it is understandable to go into the subject and try to understand why it is wrong.
What is your opinion about the net neutrality issue, a hot topic?
No comments.
The Constitution amendment Bill on a goods and services tax is in Parliament. What is your take about the 27 per cent rate being talked about?
Obviously, 27 per cent at the outset is high. But when you go back - you had those various taxes, those administrative costs, those delays. Then, perhaps, 27 percent is not high. I haven't done that calculation but in addition to the sum total of all the taxes, there were huge hassles and delays. Trucks piled up for octroi, waiting for a permission; all that costs money. We did not calculate that in this 27 percent rate. So, after you do the calculation, it is not that much. However, looking at it on a standalone basis, it is high.
Recently, the finance ministry has for the second time taken out a list of tax defaulters. They are basically naming and shaming them. Do you support the government on this?
Whatever the finance ministry is doing, it is nothing bad. So, I do not look at it in a negative way. It said there will be no retrospective taxation. It did not say India is a tax haven and you can get away without paying taxes.
Other chambers have come out strongly against some harsh provisions in the black money Bill. Do you have a similar opinion?
On the Bill, nobody can find fault in it. If there is black money, it has to be brought back. The only concern we have is that in the process, those implementing the law must not misread it and harass people. Sometimes, under the guise of implementing law, innocent people are harassed. This concept of you are guilty till you are proven innocent does not work.
