‘India’s investment climate deteriorating’
US Can’t Dictate On Policy Matters: India Inc
PRESS TRUST OF INDIA
Washington, July 15: Noting that India prohibited foreign investment in too many sectors such as retail, US President Barack Obama today cited concerns over deteriorating investment climate there to endorse another "wave" of economic reforms.
Still sounding positive about Indian economy, "which continues to grow at an impressive rate," he said that to some extent, India's slower growth is a reflection of the larger slow down in the global economy.
The US President answered a wide range of questions on the state of the Indian as well as global economy, Indo-Pak ties and American strategy in the Asia-Pacific region during an interview to PTI here.
Obama was careful not to be directly critical of the negative investment climate in India but cited the concerns of the American business community to make his points.
Many in the American business community, "one of the great champions of the US-India partnership", have expressed concerns that the investment climate in India is deteriorating, he said.
"They tell us it is still too hard to invest in India. In too many sectors, such as retail, India limits or prohibits the foreign investment that is necessary to create jobs in both our countries, and which is necessary for India to continue to grow," Obama said.
Refraining from prescribing any solutions for India's economic difficulties, the President said, "it is not the place of the United States to tell other nations, including India, how to chart its economic future. That is for Indians to decide."
Obama noted that "there appears to be a growing consensus in India that the time may be right for another wave of economic reforms to make India more competitive in the global economy."
Obama then went on to add, "and as India makes the difficult reforms that are necessary, it will continue to have a partner in the United States."
"It is important, though, to put this in the context of India's incredible growth and development in recent decades," he said.
The President pointed out that India had lifted tens of millions of people out of poverty to create one of the world's largest middle classes.
"Indian innovation is an engine of the global economy. And even with the recent challenges, the Indian economy continues to grow at an impressive rate. The Indian people have displayed a remarkable capacity to meet India's challenges," he said.
INDIA INC REACTS
Meanwhile, India Inc today acknowledged that economic reforms were lagging and growth had slowed down but said solutions to the situation should be found within and not as prescribed by outsiders.
Reacting to US President Barack Obama's assertion that the government must carry out "difficult" economic reforms, India Inc said India remains a strong investment destination with strong long-term growth prospects.
Acknowledging that the nation lagged in reforms in sectors like retail, aviation, defence and insurance, India Inc said Obama or any other person cannot be "dictating Indian government or Indian policy makers".
"US has its own problem and India has its own. Our government will take decision as per our own compulsions and requirements. However, we do need reforms but Obama or any other person cannot be dictating Indian govt or Indian policy makers," industry chamber ASSOCHAM Secretary General D S Rawat said.
US, he said, also had lot of "limitations" like the recent restrictions imposed on BPOs. "But it is there decision.
Similarly, decisions taken our policy makers should not be questioned because our economy is till doing much better than most of the developed countries," he said.
CII Director General Chandrajit Banerjee said, "India was resilient and was still growing at 6 per cent during the time of global economic uncertainties." .Banerjee said, "However, there are some issues which need to be addressed."
"We still need reforms in sectors like retail, aviation, defence and insurance. Our understanding is that we should be seeing reforms over a period of time," he added.
FICCI Secretary General Rajiv Kumar said India's long-term growth remains strong and intact.
"There are number of positive structural features that will ensure that India continues to attract investments and maintain the rate of GDP growth," he said.
"However, it is evident that some significant reform measures have to be urgently. We are convinced that investor sentiment will become positive if these measures are implemented," Kumar said.
CII said investor sentiment towards India was quite strong but "certain developments" like retrospective amendments in IT Act and General Anti-Avoidance Rules (GAAR) have affected the mood. "However, we know that the government would adequately address these issues", Banerjee said.
Lastupdate on : Sun, 15 Jul 2012 21:30:00 Makkah time
Lastupdate on : Sun, 15 Jul 2012 18:30:00 GMT
Lastupdate on : Mon, 16 Jul 2012 00:00:00 IST
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