The government is working on many fronts to reduce the regulatory burden, says a key adviser to the finance minister.
Special economic zones will help alleviate the infrastructure deficit in the country. Stating this, Parthasarathi Shome, advisor to the finance minister, said on Tuesday that the main idea behind special economic zones is to develop the much lacking infrastructure.
"SEZs will provide and minimise the burden on the units located in them, as the developers there will provide the units located in the zones certain amount of ease and facilities," he said.
Shome added that the government is attempting various other things to improve the infrastructure in the country. "The policy framework, viability gap funding, public private partnerships- all are in the direction of reducing the regulatory burden. More is happening," he said.
Shome was speaking at the India Economic Summit session on why India's supply chain is so slow. He added that India is moving ahead on the path of removing distortions and impediments in the tax system. Steps initiated around five years ago have meant that corporates pay much lower taxes than three years ago.
He added that further facilitation is required. "India is actually extremely fiscally liberal, but it has to be remembered that there are six levels of government and the widest array of thinking at the intellectual and political level. Given all this, we are not actually doing too poor a job," he said.
The participants included Paul W Bradley, president, Arshhiya Technologies International [Get Quote] India; IIM professor Pankaj Chandra; Vikram Kirloskar, vice chairman, Toyota Kirloskar Motor; Hans-Joachim Korber, chairman and CEO, Metro AG; Francois Rubichon, deputy CEO, Aeroports de Paris; and Steven Okun, vice president, public affairs, UPS Singapore.
The key concerns raised during the session included logistics problems, the fact that a single Indian market seems mythical and the multiple duties, tolls and taxes which end up delaying companies.
Raising a point, Korber said that removal of taxation and legal bottlenecks was very necessary. "The strength of the European Union is that it is a harmonized market of 25 nations. The value added tax in India is a step in the right direction. We need an unified market for agriculture products in the country," he added.
Other participants made it clear that India needs to move forward and address the issues face by companies in doing business in the country.
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