2025 to be a Year of Reforms, CII Chief Emphasizes Continued Momentum
CII President Rajiv Memani, who also serves as the Chairman and CEO of EY India, has outlined a vision for 2025, emphasizing the need for continued reforms in key sectors. In a recent interview, he highlighted power, mining, ease of doing business, and judicial reforms as critical areas for focus. Memani praised the government’s recent initiatives and reforms, which he believes have set a strong foundation for India’s economic growth, and he expressed hope that this momentum will persist.
Reforms Driving Economic Growth
Memani noted that the past year has seen a flurry of reforms, including changes to the Budget, GST, labor codes, and insurance laws, alongside a series of trade agreements. He remarked on India’s impressive economic performance, with a GDP growth rate of 8% over the first half of the year, which he described as remarkable given the global economic landscape. He pointed out that other economic indicators, such as fiscal deficit and corporate balance sheets, are also showing positive trends. According to Memani, this year will be remembered for its significant reforms and trade deals, and he hopes that the government will maintain this momentum moving forward.
Focus Areas for Future Reforms
Looking ahead, Memani outlined a wish list for the coming months, emphasizing the need for sector-specific reforms. He identified energy and mining as critical areas where improvements are necessary. While energy costs have decreased, he pointed out that companies still face higher charges due to cross-subsidization and access fees. He called for aggressive privatization of state distribution companies to address ongoing losses. Additionally, he stressed the importance of unlocking the mining sector to reduce manufacturing costs significantly. Memani also highlighted the need for substantial investments in logistics, particularly in high-speed rail infrastructure, to enhance efficiency.
Addressing Trade Challenges and Labor Codes
Memani discussed the impact of U.S. tariffs on Indian exports, noting that while overall exports have increased, the composition has shifted. He emphasized the success of trade diversification, particularly in food products, but acknowledged that some labor-intensive sectors are facing challenges. As companies prepare for the implementation of new labor codes, Memani indicated that state-level training and digital compliance solutions are essential. He urged the government to ensure consistency between state recommendations and the new codes to facilitate smoother transitions for businesses.
Tax Simplification and Disinvestment Strategies
On the tax front, Memani called for simplification measures to address pain points in mergers, acquisitions, and dispute resolution, particularly with a significant backlog of cases at the Commissioner of Income Tax (Appeals) level. He also highlighted the need for a strategic approach to disinvestment, suggesting that the government should aim for over Rs 2 lakh crore in disinvestments or privatizations over the next two years. Memani believes that building cash reserves through disinvestment could be used for productive economic initiatives, such as infrastructure development, especially in light of uncertainties surrounding China and other countries. He proposed consolidating efforts within a central ministry to enhance efficiency and speed in these areas.
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