Corporate Sector Prone to Sudden Policy Changes: ASSOCHAM | CORPORATE ETHOS

Corporate Sector Prone to Sudden Policy Changes: ASSOCHAM

By: | July 23, 2018
corporate world
Jul 23: Corporate India is becoming more and more vulnerable to sudden policy change risks, emanating both at the Central and state levels with some of the well-known companies getting caught off the guard by issuance of a government notification or two, ASSOCHAM said, expressing a view that any amendment in rules should first involve stakeholders’ consultation before being pronounced.
“Increase in truck axle load by the Centre and the Maharashtra Government directive on food and beverages in the cinema halls are the latest examples of the policy changes coming as a bolt from the blue for the corporates. Likewise, if there is one sector which is prone to policy changes and market disruptions, it is the telecom, running through the entire value chain,” an ASSOCHAM note said.
The chamber Note on the Policy Change Risks, finds with concerns that even the big time organised players are not prepared to face the fast changes which accentuate the rapid disruptions being brought around by technology and emergence of business paradigm, challenging the established models of economic enterprise.
“One announcement of business roll outs across the broad band value chain by telecom behemoth has shaken the entire value. While the biggest of the players would offer the entire value proposition be it television, land line phone, device connectivity, the others are fragmented among businesses like DTH, broad band etc in stand alone models. Somewhere , a comfort zone had set in among the existing players. It is this comfort zone which is being shaken and challenged by technology disruptions by those with deep pockets,” said ASSOCHAM Secretary General Mr D S Rawat.
On the other hand, the policy changes being brought, both at the Centre and the States are coming not only from the sectoral regulators but also the government departments, shaking the established players. Changes in the truck axle load and food and beverages in cinema halls fall in this category. Likewise, the telecom regulator has come out with its recommendations on data ownership even as a Supreme Court panel is going into the entire gamut. Even a Parliamentary Standing Committee on IT is looking into the issue of data privacy and other related issues.
“While the companies must be more geared towards policy dynamics, the industry chambers   can act, as had always been the case, as a perfect connect between the industry and the governments, both the Centre and the states for changes in the policy dynamics. The only issue is that there should be wider consultations before the changes are announced. Maybe, the GST Council model is an ideal way of staying dynamic while remaining predictable.” the chamber noted.