MUMBAI : Jamshyd N. Godrej’s calm exterior is like a veil, shrouding his fiercely competitive spirit. As chairman of Godrej and Boyce Manufacturing Co. Ltd, he is constantly seeking to steer his businesses ahead of competition.
Godrej and Boyce, through its 14 subsidiaries, runs businesses ranging from consumer durables to manufacturing of industrial products to realty. In Mumbai, a city where land is scarce and living is expensive, Godrej and Boyce owns 3,400 acres. On 8 November, while addressing a manufacturing summit organized by Confederation of Indian Industry, Godrej said the government’s move to cut corporate tax rates needs to be accompanied by policy reforms to boost foreign direct investment in manufacturing. He said various free-trade agreements India had signed over the years had not benefited the country.
In an interview, Godrej, 70, an engineer by training, opened up about the need to transform business processes and why the government must overhaul its policies to encourage entrepreneurship and promote ease of doing business. Edited excerpts:
Under the new development plan (DP), is there an opportunity to expand your portfolio of developable land?
Mangroves can never be developed. The new DP has only changed a few things in the way development was done. And, mangroves continue to be protected. It is also an internal decision not to do anything on mangroves, even if it was allowed.
How do you to monetize land owned by Godrej family?
I will not be able to comment on anything. It’s a family matter.
Have you seen any impact of the slowdown?
Our industrial businesses are long-cycle. If you look at the furniture business, both consumers and office side, it is still good and vibrant. Home appliances, until this year, it has been very good. Unless there is some significant slowdown beyond what it is today, I don’t see it affecting the home appliances business.
Are you cautious on expanding? What are the investments you are making?
We are cautious but we are expanding. We are building a new manufacturing unit, a smart factory, in Khalapur, near Khopoli. It is for expansion of all our products. We will set up similar factories across the country. This project will take another 10 years.
How do you see the Centre’s corporate tax cut move?
There are two issues, which are independent. Whatever the government can do to enhance the demand side, it is essential to do with taxation, which is indirect tax and GST. So, what we need now is a reform on GST, reducing the rates, reducing the disparity from 0-40% plus wherever it goes to. These are things that will help revive demand. Unless you reduce GST, I don’t see how you are going to make a difference on demand side. I think across the board we need reduction in GST. On corporate tax, we definitely need a competitive tax situation both on corporate and personal taxes. You can’t do one reform without doing the other. The number of people who pay income tax in India is less than 1%. You are never going to be able to make real revenue from personal income tax. We need to look at all our competitors in the Asian region and see what the personal income tax rates are and bring it down to that. The government should focus on growth drivers because that’s where the revenue will come from. By reducing GST we may see an immediate 10-15% increase in growth rate. But, not reducing the personal tax and only reducing corporate tax will create a fungibility issues. Both tax rates should come down together.
Published On : 18-11-2019
Source : Live Mint
