Vikram Kirloskar, the new president of lobby group Confederation of Indian Industries, said he is attempting to improve the government and industry trust that has hit an all-time low, The Times of India reported on Wednesday. Kirloskar said this has affected economic expansion due to a higher compliance burden.

“We need to improve industry-government and industry-society mutual trust and respect,” he said. “Industry-government mutual trust may be at an all-time low and this causes perhaps a lot of over-regulation and perhaps a loss of one or two percentage points in Gross Domestic Product growth.”

The vice-chairman of Toyota Kirloskar Motors also demanded a reduction in “very high” tax rates, which he said would be required in order to boost investment. Kirloskar agreed that regulatory burden had been reduced for larger companies, but a wide range of taxes and corporate filings had increased. “We are proposing that remove the exemptions [available to corporate sector],” he said. “Our calculation is 18% corporate tax, zero exemptions, it’s revenue neutral.”

Kirloskar said that he agreed with Prime Minister Narendra Modi’s vision of “Sabka Vishwas” which he had added to his original slogan “Sabka Saath, Sabka Vikas”. Modi had claimed this was going to be one of the government agendas after the Bharatiya Janata Party’s resounding victory in the Lok Sabha elections.

Kirloskar said he had persuaded around 1,000 of the 10,000 members of the Confederation of Indian Industries to sign a new code, under which companies would disclose 70% to 80% of their revenue to increase accountability. “We are persuading people, if we follow the code we improve the trust with government and that is when regulations will come down,” he told The Times of India. “Let’s do clean business and let’s get the government to trust us.”

Kirloskar’s remarks come at a time when the country grew at its slowest pace in five years at 5.8% in the March quarter. The growth rate during 2018-19 slowed down to 6.8% from 7.2% recorded a year earlier, according to Mint. The economic slowdown has also reduced sales of automobiles in the last few months due to financing costs and liquidity squeeze in non-banking finance companies, Kirloskar said.

He said that a stronger government provides confidence and triggers investment and rationalisation of taxes with focus on equity creation will be needed to put the country back on the high growth trajectory. “There is a debt overhang,” Kirloskar said. “One cannot grow GDP [gross domestic product] on debt alone.”