India Inc Must Stop Waiting for Godot

Instead of pleading for handouts, businesses need to proactively take steps to deal with the slowdown.

- R SRINIVASAN

Finance Minister Nirmala Sitharaman has announced that she has yet another booster dose for the economy up her sleeve, which she will announce shortly. The markets reacted by tanking over 1.7 percent, although the proximate cause for Tuesday’s fall was the drone attack on Saudi Aramco, which knocked out about half its capacity.

The first round of confidence-building measures she had come out with was aimed at addressing some of the pain of the auto sector, which had seen car sales nosedive by over 41 percent year-on-year in August, with commercial vehicle sales nearly matching suit with a 39 percent plunge in sales. Unfortunately, since Ms Sitharaman could not give the industry what it wanted — a tax cut on automobiles, which fell within the purview of the GST Council and not the Union government — that “booster pack” singularly failed to enthuse anybody.

The same went for the subsequent rounds of “stimulus” packages, which all essentially turned out to be rectifications of policy errors and bureaucratic bottlenecks created in the past, and nothing new or dramatically different, which would help change sentiment and yank the economy out of the seemingly unending slump it is in.

Which is why the latest promise of yet another “package” is not exciting anybody at all. Tuesday’s news, that the GST fitment committee, which recommends changes in tax rates to the GST Council, had given a thumbs down to any slash in GST rates for the automobile sector (and, for good measure, biscuit makers, who had projected 10,000 job losses because biscuits had turned too pricey for consumers) only served to deepen the gloom.