GST absolutely necessary for India, says Suresh Krishna

The implementation of Goods and Services Tax (GST) is absolutely necessary for the country as it has the potential to double the GDP, according to Suresh Krishna, chairman and managing director, Sundram Fasteners Ltd. (SFL).

“There is nothing wrong in it (GST),” Mr. Suresh Krishna said in an interview to The Hindu.

“You will understand the benefits of it after five or 10 years. After the implementation of GST, the gross domestic product (GDP) of New Zealand grew by four times. I will be happy if the GDP grows by two times in India,” he said.

After GST took effect, check posts at State borders had vanished, paving the way for easy movement of goods, he said. “For want of C form, vehicles used to block way for other vehicles. It resulted in huge amount of wastage [of fuel] and time. Now, all these have gone. The savings is great,” he added.

 

Queried about the scam at the Punjab National Bank (PNB), Mr. Krishna cautioned the Centre against taking any knee-jerk action just because a few industrialists had duped public sector banks.

“What happened in the case of Punjab National Bank is unfortunate. [But] even Lehman Brothers Inc. collapsed despite strict controls, in the U.S.,” he said.

He said public faith in the banking system had been dented in the wake of the fraud as defaulters had fled India.

“There will be certain apprehension in the minds of the public. There is no doubt,’’ he said.

He felt that the government should not go in for any knee-jerk action similar to the one taken in Satyam Computer Services’ scandal. He said one should not lose faith in the banking system just because of one [PNB] failure. “It will be a great error. You have to trust the Indian banks. You have public sector banks, private sector banks and reputed banks in the country. It is up to you to make your own judgement. We need to carry on,’’ he added.

Having experienced a challenging period for the manufacturing sector from ‘60s to ‘90s, Mr. Krishna said he had always remained optimistic. Asserting that India was capable of producing quality products of international standard, he said he was against levy of taxes in the guise of protectionism.

Imports to be hit

Referring to the recent announcement by U.S. President Donald Trump on tariff on steel and high-end bike imports from India, he said: “It is not good for any economy to put higher import duty. It will definitely affect imports. After the U.S., China will do it.

“One should have an open economy to be the best in the world. Or else, it will become uncompetitive. And, you will not be able to compete in the other markets,” he said.

Pointing out that India was doing well in automobile and auto components, Mr. Krishna said: “We are becoming one of the largest producers of auto vehicles in the world by producing three million cars and 15-16 million motorcycles every year.

“We are in a sunrise industry. We will be number three or four very quickly. It is only a matter of time. [The] same may apply for bus, trucks, off-road vehicles and excavators.” He felt that the country could absorb 10 million cars and 50 million two-wheelers. Personal transportation was a common aspiration of the middle class in India, he said. He estimated about 30-40 million people to be in the middle class bracket.

To a question, he said it would take more than 20-25 years for the country to realise its dream of fully moving over to electric vehicles. The industry and the users, he said, had to deal with three vital issues — type of battery, its disposal mode and infrastructure such as charging stations.

“The battery technology has to improve. We have to see whether the industry opts for lithium or cobalt,’’ he said. Battery should not be viewed just a component of cost of vehicle alone. Its impact on the cost of ownership also mattered, Mr. Suresh Krishna added.

To a question, he said the latest Budget of the Centre was pro-farmer. “I do not agree that they are going back on reforms. There are certain exigencies. They are doing quite well.’’

Source::: The Hindu, dated 04/03/2018.