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Budget 2015-16: FM must introduce steps to boost GDP growth, says Godrej

Speaking on his expectations from the Budget, Godrej said this is the right time for Finance Minister to bring in measures to increase Gross Domestic Product (GDP) growth as his (FM’s) subsidy bill would be much lower than in the past due to fall in crude oil and food prices.

Budget 2015 is a great opportunity for Finance Minister to introduce steps that will boost India’s economic growth, said Adi Godrej, chairman, Godrej Group.

Speaking on his expectations from the Budget, Godrej said this is the right time for Finance Minister to bring in measures to increase Gross Domestic Product (GDP) growth as his (FM’s) subsidy bill would be much lower than in the past due to fall in crude oil and food prices.

“The stock market is firm, so disinvestment can be very strong during the next financial year. So, fiscal deficit can be managed and incentives need to be given to promote GDP growth,” Godrej told CNBC-TV18’s Ashmit Kumar.

He feels the government should look at decreasing the Minimum Alternate Tax (MAT). “There are important things to be done, one, the MAT rate needs to be halved because people are not able to take advantage of the incentives which are already there”.

According to Godrej the other areas where the FM must focus is reducing corporate tax rates or remove surcharges and also to increase the slabs in personal income tax rates. “That will leave more money in the hands of people for consumption increases. By the end of the year he would have made up for all the revenue by giving these advantages and GDP growth rate would be much higher,” he said.

Godrej feels there are two kinds of money waiting to be invested. One is Foreign Direct Investment (FDI) and the other is Indian investments. “Indian investments are headed up because the real interest rates are quite high. Today if you look at the Wholesale Price Index (WPI) it is actually zero or even slightly negative whereas the bank lending rates are 9-10 percent. So, the real interest rate is very high, it must come down,” he said.

He also said that international investors are waiting to make sure that ease of doing business in India improves. “Once that happens, I expect some announcements in the Budget, then investments will pour in but if the GDP growth is accelerating well then investments will come in faster,” he added.

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