If wishes were horses, then India Inc will ride the hope that in 2010 the government keeps intact sops announced last year to cushion the impact of the global economic downturn.
The auto industry, consumer durables sector and retail and FMCG segments are keeping their fingers crossed wishing that tax concessions they received last year stay through the New Year in order to beat the growth rates reached before slowdown hit the economy.
“Interest rates should remain low, commodity prices should remain where it is today and the stimulus packages should continue,” Society for Indian Automobile Manufacturers (SIAM) President Pawan Goenka said.
He said the above factors are important if India Inc has to keep the growth momentum in the New Year.
“Our fear is that if the government reverses the sop provided this year in the form of reduced excise duty, the growth of the industry will slow down,” said LG Electronics India Head of Sales Amitabh Tiwari.
Last year, the government had announced a four per cent CENVAT duty reduction to give a boost to the Indian industry which was facing the impact of global economic slowdown.
For the FMCG sector, which drives major revenue from the rural markets, the expectation from the government is that it ensures villages become a part of India’s growth story.
“I expect the government to deepen its focus on the rural economy with greater fiscal incentives, rural employment. These steps would surely go a long way in giving the rural economy and rural demand a greater boost," Dabur India Ltd CEO Sunil Duggal said.
As for the retailers, they want industry status coming their way in 2010.
“Currently, the tax policies are fluid with lot of discrepancies in taxes levied by local authorities. Industry
status would bring a sort of formality,” Koutons Retail India Ltd President Balvinder Singh Ahluwalia said.
He said policies of the government should be such that they result in higher disposable incomes in the hands of customers so that they loosen up their purse-strings and it results in higher sales for retailers.
“Even as the economy is picking up, penetration is still very low in the country. This is where the opportunity lies and growth would be faster if companies could penetrate deeper in the market in 2010," Consumer Electronics and Appliances Manufacturers' Association General Secretary Suresh Khanna said.
The Pharmaceutical industry, which is set to become a Rs one lakh crore industry in 2009, however, has a totally different wish for the new year.
“My wish for 2010 is that the government should do something to give recognition to research and development in the pharmaceutical sector in the upcoming budget,” Indian Pharmaceutical Alliance General Secretary D. G. Shah said.