One important task is to get the existing capacities working. For example, in the power sector we have a capacity of 230,000 megawatts (MW) but at least 10% or 23,000MW is not working or operational because of raw material linkages and my rough calculation is if we get this 23,000MW operating, we can add at least half a per cent to India’s gross domestic product (GDP). It has a huge multiplier impact because as this power becomes available, the cost of power comes down, other industries which are shut today start working and so on.
Secondly, improve the investment climate and for that you need to clarify the approach towards access to land, natural resources and approach towards environmental clearances. If we bring clarity there, we can improve investment climate in general.
Thirdly, government entities like the National Highways Authority of India (NHAI) and state electricity boards (SEBs) can also kick-start investments by just paying overdues to the private sector. If all these overdues are paid, there will be about Rs.1 trillion that will go to the private sector, which will provide the liquidity to start re-investing. Also, large public sector undertakings (PSUs) are sitting on huge cash. The top- five PSUs are sitting on cash of more than Rs.50,000 crore and they also have projects in the pipeline worth that. So, if they use the cash to set up the projects, some amount of confidence can go to the private sector as well.
We also need clarity on the path towards fiscal consolidation and fiscal deficit management and also actions to make sure we get there. The final thing would be to quickly bring to closure clarity around GAAR (general anti-avoidance rules) because it has introduced a lot of uncertainty. The government has announced that it wants to bring clarity, but the final signing, sealing, delivery has not yet happened. If we do that, it will send back a huge amount of confidence to the investing community abroad to say that there is certain clarity around the investment climate.