India Inc echoes Obama; for easing FDI norms
The Confederation of Indian Industry (CII), on Tuesday, urged the government to urgently announce confidence-building reforms like opening up multi-brand retail trade that would send out positive signals to global investors about the Indian economy.
Echoing virtually US President Barack Obama’s views on the “deteriorating investment climate” in the country, the industry lobby said the government should also take steps such as raising foreign direct investment (FDI) in civil aviation and defence production.
“CII strongly feels that it is time to announce a few confidence building reform measures such as announcing increasing FDI caps in civil aviation, defence production and opening of FDI for multi-brand retail,” said CII President Adi Godrej.
“These (measures) will go a long way in correcting the perception about India globally.”
Godrej added that recent policy decisions like introduction of GAAR (General Anti Avoidance Rules) and the announcement of retrospective amendments to income tax law had affected business sentiments and investor confidence in the Indian economy globally.
Focus on reforms
The Federation of Indian Chambers of Commerce & Industry (Ficci) also said the country’s policy makers should focus on the reform process than on countering Obama’s views which are aimed at shoring up the US president’s support bases in an election year.
“We may see more of this rhetoric in the run-up to the November’s presidential race. We should focus on reforms,” Ficci Secretary General Rajeev Kumar told IANS.
According to Kumar, the government should look at other reform measures which will have little or no political backlash like an amendment to the Agricultural Produce Marketing (Regulation) Act and implementation of cash subsidies transfer to the poor.
The government Monday brushed aside Obama’s views, stating that India’s foreign direct investment policy regime is investor-friendly and the country has taken an array of steps to liberalise its economy and ease norms related to foreign investments.
The Prime Minister’s Office (PMO) quoting a recent UNCTAD report pointed out that India is the third most desirable destination for FDI.
“Foreign direct investment inflows to South Asia turned around as a result of higher inflows to India, the dominant FDI recipient in the region.” Pushing the point further, Commerce and Industry Minister Anand Sharma said, “Obama’s perception is different from reality”.
