Amid emerging gloom-and-doom narratives shadowing the Indian economy and the Indian rupee sinking to a new low, Prime Minister Narendra Modi played the cheerleader as he exhorted India Inc to take more risks and step up investments.
In a meeting with crème de la crème of India’s corporate world in New Delhi on September 8, the reform-friendly Indian leader sought to present a cheery picture of macroeconomic fundamentals and fiscal indicators to goad industrialists to show initiative and boost investments. “While the government has a role to play, industry also has a role to play in demand creation for investments,” the prime minister said after a nearly three-hour meeting with top industrialists, financiers and bankers.
Industry leaders looked inspired by the prime minister’s pep talk, but used the opportunity to convey their concerns about major tax reforms such as the Goods and Services Tax (GST). Finance Minister Arun Jaitley exuded confidence and assured them that the GST would be introduced sooner rather than later.
Issues such as the ease of doing business, problems faced by stalled projects, stressed corporate and bank balance sheets were concerns repeatedly raised by most industrialists. “The PM was emphatic that risk-related entrepreneurship should not be subdued, but catalyzed. A lot of new investments could be made in soft infrastructure like affordable housing, hospitals as well as hard infrastructure like roads and highways,” said Yes Bank CEO Rana Kapoor.
There were suggestions made for de-stressing steel and textile sectors. A unanimous agreement by everybody present in the meeting was that the agriculture sector required a renwed focus. Mr Jaitley reassured the investors that India is unlikely to be impacted by global turmoil as the fundamentals were reasonably strong although he admitted that the global scenario will have some impact on equity and currency markets.
India’s chief economic advisor Arvind Subramanian spoke about the era of relatively cheap oil and stressed that in the backdrop of China’s turmoil India will remain relatively attractive. Citing infrastructure is important for manufacturing and the value added chain, he gave examples of corportaes such as Siemens and Xiaomi which are committing investment in India. He admitted that some of them are investing in India as a hedge against the slowdown in China.
The meeting was attended by corporate titans which included, among others, Tata group chief Cyrus Mistry, Reliance Industries Chairman Mukesh Ambani, Reliance Group head Anil Ambani, State Bank of India Chairman Arundhati Bhattacharya, ICICI Bank Managing Director and chief executive Chanda Kochhar, Aditya Birla Group Chairman Kumar Mangalam Birla and Adani Group chief Gautam Adani.
Finance Minister, RBI Governor Raghuram Rajan and Niti Aayog Vice-Chairman Arvind Panagariya were also present at the meeting.
While the sentiment after the meeting sounded positive for the industry leaders, it is now left to the government to walk the talk and take concrete action on the ground ensuring successful implementation of its much-touted reform policies.
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