In a chat with ET Now, YC Deveshwar, Chairman & ED, ITC shares his views on the job scenario in India as well as his macroeconomic outlook. Excerpts:
ET Now: What is your outlook for the job scenario in the country?
YC Deveshwar: Over the last many years, even during the periods of high rates of growth, we have not provided jobs. There has been consumption without creation of jobs. Therefore, in the shorter run we have to choose those areas that can have a large multiplier impact.
Those areas really are where agricultural raw materials are used. For example, food processing has a big job multiplier. So how do you give it a boost? My belief is that food should not be taxed. There should be no tax on food processing. The fact that it is processed food itself makes it expensive. Therefore in India only 4% of agri produce is processed, whereas in Brazil, Philippines and Malaysia, it ranges from 70% to 80%. In India only milk is processed up to 35%. So if we raise it from 4% to 40%, a huge amount of employment gets created.
ET Now: You spoke about food processing and the need for no taxation on it. Is that perhaps something which you would expect in the budget? Some sops on that front?
YC Deveshwar: This is an idea that one wants to propagate. It will take a while before competitiveness can really take root in India because the economy has to be reformed throughout and much of it lies at the state level and at the local government level. Those people now also have to be as passionately involved with creating a competitive India as Prime Minister Modi's government is.
ET Now: The government of course is clearly business friendly, it has taken a lot of steps to revive the animal spirits, so to say. What are some of the additional steps that it can take to provide an impetus to the overall investment climate? Mr Jaitley has spoken about a friendlier tax regime. Any other areas where you think the government can pay attention?
YC Deveshwar: The entire regulatory environment has to be reviewed from the lens of responsible competitiveness, from the view point of competitiveness and not from the view point of the sub area because when we are looking at environment, we forget competitiveness, when we look at labour we forget competitiveness.
ET Now: This is perhaps a sector which has really occupied the mind space of India Inc for the past few years and that is the ecommerce sector. What are your thoughts on some of the valuations which some of these portal command as an industry veteran?
YC Deveshwar: We have never grown up on valuations, we have grown up on profitability. I am also waiting to see how it pans out.
ET Now: But your thoughts on the valuation front because some of these valuations are perhaps some people are calling it unrealistic?
YC Deveshwar: But people who are putting in money must have evaluated it. Otherwise nobody puts real money behind an enterprise unless they can see the end of the tunnel.
ET Now: So as an industry veteran, are you bullish about the growth of the ecommerce sector from a distance if you watch it?
YC Deveshwar: Well, digital world is a way forward. At the end of the day it is convenience. So how much is practical and how much it will displace the traditional retail sector we will have to wait and see.