Invest more without fear, create jobs: PM Modi tells corporate India
Briefing reporters about the meeting, Finance Minister Arun Jaitley said on its part, the industry urged the prime minister to step up investments in further strengthening the economy.
New Delhi: Indian industry needs to step on the gas and make more investments, create more jobs to be able to take advantage of some benefits of the current global economic scenario.
This is the broad message Prime Minister Narendra Modi conveyed to the captains of Indian industry and top economists in a three-hour long meeting today. Modi and his team once again emphasised that the impact of the global events on India has been minimal because of the country's strong fundamentals and in fact, India needs to take advantage of things like low oil prices to build on its strengths. In effect, he put the ball in industry's court if India is to remain largely unaffected by the global financial turmoil.
Briefing reporters about the meeting, Finance Minister Arun Jaitley said on its part, the industry urged the prime minister to step up investments in further strengthening the economy - in areas like agriculture and infrastructure. India Inc. also wanted more steps on the "ease of doing business" front, lowering cost of labour and capital besides some decisions on stressed sectors like steel, discoms and tourism. It won't be wrong to say that both sides, the government and Indian industry, expect more from each other. Jaitley said no time line has been fixed for any specific policy interventions from the government's side which could indicate increased public investments.
But the prime minister has assured industry that the Bankruptcy Law is in its final stages of drafting - this was one specific demand of the industry besides asking the government for a clear definition of corruption in the Prevention of Corruption Act.
Chief economic advisor Arvind Subramanian said three major issues were discussed at length - the uncertainty over the US Fed policy, the advent of the cheap oil era and the US-Iran Shale oil deal besides China - its changing growth model and lessening dependence on manufacturing.
In his presentation at the start of the meeting, the CEA pointed out that cheap oil means India will be better able to maintain its economic stability since oil prices are a major factor in current account and fiscal deficit calculations. He also said India's exports to China are far lower as percentage of GDP than other economies and therefore India is likely to get less impacted by the Chinese turmoil.
Subramanian mentioned recent investment announcements by Siemens, Foxconn and Xiaomi to say that Indian remains an attractive investment destination for foreign companies.
To a question on deflation, Jaitley said the issue did not come up for discussion in today's meeting. He similarly dismissed another question on interest rates, saying setting rates is an RBI prerogative and the government would not like to indicate a direction either way. On a timeline from either industry or the prime minister on specific steps to be taken to lessen the impact of global turmoil on India, he said no timeline had been set and today's meeting was a broad based one.
Jaitley once again emphasised that the prime minister wants more investments from the private sector since it has more risk taking ability. Will Indian Inc oblige? This remains to be seen.
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