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Finance minister Nirmala Sitharaman will interact with chief ministers and finance ministers of state governments in a virtual conference on Monday to develop a collaborative approach to boost growth and private investments in the country.

Sitharaman will urge states to undertake reform measures to take advantage of the positive sentiment of investors towards India as they seek to diversify their businesses away from China. The meeting will also be attended by secretaries of the Union government and chief secretaries and financial secretaries of states.

Explaining the context of the meeting, finance and expenditure secretary T.V. Somanathan said strong economic recovery following two waves of the covid-19 pandemic and global geopolitical developments had put India at a vantage point.

“Therefore, India is becoming in relative terms a more attractive destination for investment, both domestic and foreign. So there is a lot of positive investor sentiment on the private sector side, though perhaps not fully translated into actual investments on a big scale through capital market activities, indicating a lot of investment is probably on the cards. So, this positive sentiment is something that the finance minister and the government believe should be capitalized upon to take India towards a higher sustainable growth trajectory. It’s an opportunity that we shouldn’t let go," he added.

Somanathan said though the Centre has been taking measures to revive investor sentiment from time to time, several steps needed to push India on a sustainable higher growth path lie in the domain of state governments. “State governments and their policies play a critical role in leading us to the higher development path that we seek now at this juncture. It is in that context the Union finance minister is holding this detailed interaction. The focus of this interaction will be on state-level issues, opportunities and challenges, which would enable the nation to go to a higher trajectory of investment and growth. If there are items on which support of the Centre is needed, then that is also something we will be looking at," he said.

Economic affairs secretary Ajay Seth said the attendees of the meeting would discuss how both the Centre and states can help each other attract investments, leading to faster growth and employment generation sustainably. “When investment takes place in the ground, the first level of interaction happens with the state authorities for various approval processes—whether it is land-related, urban law-related, forest-related, availability of water and electricity at competitive prices. This interaction is not only about what the government can invest into the economy. This meeting will look at how to work collectively to facilitate private investments," he added.

The finance ministry, in a statement, said that Sitharaman seeks to embark on a collaborative growth vision for the nation and encourage an open exchange of ideas centred on enhancing the investment climate of the country.

“The envisaged interaction will attempt to create a policy discourse and a facilitating environment for inward investment-led growth. This will be enabled by a proactive approach to investment promotion, efficiencies brought about by ease of doing business reforms, and an emphasis on accelerating approvals and clearances up to urban local bodies levels," the finance ministry added.

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