BackIndian industry bullish on Modi govt’s initiatives
Top industry executives attending the India Economic Summit said the country seems to be back on the growth track
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New Delhi: Top business executives attending the India Economic Summit in New Delhi welcomed the initiatives taken by the Narendra Modi government, saying the country is back on the growth track.
“I am extremely confident. A country in general needs leadership and there is a leadership; it needs direction and there is a direction; it needs confidence and there is confidence here in India. Now, it is for us to do something. We will play our role," said Etienne Benet, head of Nestle South Asia Region and Nestlé India. “What we really need is a bit of goodwill from the government. We know how to do business. We see ourselves as people who can help progress happen."
The government, which came to power promising to revive the economy, has raised foreign direct investment (FDI) limits in defence, real estate and railways and freed diesel prices.
Modi, who led the Bharatiya Janata Party (BJP) to a sweeping election victory on a campaign plank of development and job creation, has announced labour reforms and quicker approvals for businesses to boost manufacturing. Modi is aiming to replicate at the national level his success in bringing investments to Gujarat as the state’s chief minister by easing the country’s cumbersome labour laws and cutting red tape.
India can attract investments like China but it needs to smoothen the entire process, said Anand Mahindra, chairman and managing director of Mahindra and Mahindra Ltd.
“It might be time for the RBI (Reserve Bank of India) to think of a rate cut," Mahindra said in New Delhi at the sidelines of the India Economic Summit. “The time has changed and so has the need," Mahindra said, pointing to an improved situation.
Inflation measured in terms of wholesale price index (WPI) touched a five-year low of 2.38% in September. Retail inflation has also dropped to 6.46%, the lowest since the new series was released in January 2012.
“This is a large flywheel. It is not a jump-start, it takes a while to gain momentum. I see signs that the flywheel is beginning to move," Mahindra said. He said he is hoping that the “little dose of reforms" will turn into big-bang reforms.
The government faces the difficult task of re-igniting investor interest in the manufacturing sector, which is plagued by issues related to land acquisition, taxation, labour and the difficulty of doing business in India. The country is ranked 142 in the World Bank’s Ease of Doing Business Index that grades 189 countries.
The share of manufacturing in India’s gross domestic product (GDP) has hovered around the 15% mark since 2004-05.
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