Budget 2014: TVS chief Venu Srinivasan urges FM Arun Jaitley not to be shackled by fiscal deficit
Srinivasan counselled FM to eschew conventional economic wisdom and increase the fiscal deficit so that new investment in infrastructure such as roads and ports can be created.
Srinivasan, the chairman of Chennai-based TVS Motor, said in a rare and forthright interaction that the budget should not just be about numbers but also convey the reformist intentions of the Narendra Modi administration. "It is very important that this flickering lamp of hope is kept alive by signals in the budget," he said in his first interview in more than three years.
Srinivasan, a former president of the Confederation of Indian Industry, also had high praise for Narendra Modi, saying the former Gujarat chief minister will be known as one of India's "great" prime ministers. "I think he is the most hard-working and highest-energy person we have seen in public leadership."
In uncommon criticism of the Securities and Exchange Board of India, he said the capital market regulator is over-reaching its bounds and the new company law is an alien anachronism.
"We would rather have an overseas company which will have a subsidiary here because Sebi has become a dragon …If independent directors have more powers than the person who is promoting the company, then why should we promote the company?" Jaitley will present the NDA government's first budget on Thursday amid an improvement in market and business sentiment because of the outright win for the BJP under Modi's leadership.
However, the country's finances are in poor shape, inflation is proving to be a major threat and Jaitley has spoken of the need for "bitter medicine" to restore economic health.
Srinivasan, who transformed a family business into one of the country's leading motorcycle manufacturers, counselled the finance minister to eschew conventional economic wisdom and increase the fiscal deficit so that new investment in infrastructure such as roads and ports can be created.
"Bitter medicine has to be given in very small doses. But if you do the deregulation and transparent reform, that will get the country going very quickly," he said in an interview where he declined to discuss his company, citing the need to maintain confidentiality about the TVS Motors' strategy.
The company's recent bike launches — Star City Plus and Jupiter — are helping TVS Motors, India's fourth-largest, motorcycle manufacturer, regain market share. Srinivasan, 62, is credited with providing the leadership that enabled TVS Motors to launch India's first indigenously designed and manufactured motorcycle Victor in 2001.
An engineer and a management graduate from Purdue University in the United States, he said the key to job growth and prosperity in India is in the manufacturing sector where 100 million jobs must be created. "The focus of the government should be how we can become an export hub like China and create a wave of manufacturing enterprises which provide meaningful employment."
Srinivasan had strong words for the Congress-led UPA government that ruled for a decade from 2004, saying it spoke the language of inclusion but had squandered several of the gains from the past, including the reforms of 1991.
"UPA I got the tailwind of NDA which had set up very good governance standards," he remarked. On the other hand, he said that under Modi's leadership, Gujarat has topped in several social and economic indicators and demonstrated that equitable development is possible.