With over 1,500 corporate leaders and 600 CEOs and policymakers from across the world, the World Economic Forum (WEF) kickstarted its annual Davos summit on Monday to discuss the most pressing issues being faced by the global economy.

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Sanjiv Bajaj, president of CII and chairman and MD of Bajaj Finserv said the general feeling is that the worst is over but there is always a caveat as the world lives in very uncertain times. However, currently, it looks like the worst is over.

He said Budget 2023 needs to continue the expansion in government infrastructure funding as it has played a very positive role in the last few years. It has held our economy together, provided rural and urban jobs, and created that much more domestic consumption.

Bajaj said the current period really hurts people at the lowest income of society the most. Inflation has hurt them and the loss of jobs has hurt them, hence a cut in personal income tax only at the lower segment will help these people to stretch their rupee a little bit more.

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Talking about the PLI schemes, he said it has been very positive, "so extending those and adding a few sectors towards an employment linked incentive scheme like the logistics sector, tourism sector, can provide great fillip. So essentially productive use of the capital for greater jobs and more consumption."

TV Narendran, CEO and MD of Tata Steel, said China opening up has really helped commodity prices. Not just steel, if you look at copper prices, it has gone up by about $400-500 in the last month. Steel prices have gone up in China. So overall, the company sees a positive sentiment.

He said the current commodity prices will be sustainable for some time. The only problem is Europe where the demand is still very fragile. The US and Latin America are quite okay, China is looking good and India is looking great. So in many ways, many parts of the world are picking up from where they left off over the last few months. So, the company is quite positive over the next 6 months.

Rajiv Memani, the country managing partner at EY India, said India is in a very good position to attract good flows in the second half of this year due to India’s GDP growth, tax buoyancy, and the macroeconomic situation.

He said, "I think the maximum marginal rate of tax in India is 43 percent. In most countries in the world, it is there or thereabouts. In some countries, it probably reaches 45-50 percent but the benefits that they enjoy in terms of education, healthcare, and everything make up for the difference. So I don’t anticipate the government to raise taxes in budget 2023."

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Memani said the biggest change that the government needs to make is really on the dispute resolution side, "So simplification in terms of capital gains, in TDS – we have 31 sections that deal with TDS, there are rates ranging from 0.1 percent to 30 percent, so I personally think the one big focus area to attract capital and to make it easy for doing business, is to look at simplification as there is far too much of litigation."

Chandrajit Banerjee, director general of CII, said the business confidence survey indicates that in most of the PLI sectors, there is feedback about adding on to capacity. The capacity utilisation is still around 75 percent in most sectors but the expectation of growth in terms of the bottom line of companies is very buoyant.

"If you look at the global outlook, there is an expectancy of the USA bouncing back by the second half of the year. The only laggard is Europe. So there is a lot of optimism. The challenge only comes in exports but there is a lot of inflow coming with the interest arbitrage going down between the USA and India. So we are also seeing a lot of FII portfolio investments coming in," he added.

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First Published:Jan 16, 2023 11:31 PM IST