Decoder: FM is tone deaf to key investor concerns

“These have already been said. So nothing new that I am saying,” says Finance Minister P Chidambaram in an interview in the Economic Times.

Though he said this in reply to a question on the way ahead for reforms, his answers to many other questions pretty much means the same. The only difference is that he may be putting it in different words.

For example, take the question on what were the concerns raised by foreign investors during his road shows abroad. “These are usual concerns-about slowness of decision making, unexpected bottlenecks in implementation, some ambiguities in policy, ambiguities in tax laws. These are the usual concerns that we hear wherever we go,” he says.

Read the interview further and the feel one gets is that these usual concerns are actually the ground reality.

Take the case of Vodafone tax issue. According to Chidambaram, nobody abroad raised the issue and so “the concern is more in India”.

“Besides, the law ministry has not told me anything officially. We are still waiting for their comments on the cabinet note circulated.” Months have passed and the government is still waiting for a reply from one of its arms to take a final decision yet.

So, the finance minister himself says that one of the “usual concerns” raised by the foreign investors - slowness of decision making - is for real.

Even the decline in international oil prices is not bringing about a big change, because “all these had been factored in when the budget was presented”.

However, his caution on oil prices is well placed. The prices going below $100 a barrel has happened before too only to bounce back in a short span, he says. “Let us hope that this softening lasts for a few months.”

Worse still is the development on the vexed issue of Mauritius tax treaty. Here, the movement, if any, is actually backward.

The talks with the Mauritius team who came to India did not yield positive results. “So I am afraid it is back to the drawing board now,” he said.

As far as the prevailing political uncertainty at the centre is concerned, Chidambaram says he may be tone deaf and can’t hear any “election bugle”.

Given the situation, one need not be surprised if the third tour of the finance minister fails to change foreign investors’ approach towards India, though he insists there is a change for better in their understanding of India and its problems.