PM allays fears on economic reforms, invites US investments

Ajay Kaul
Washington, Nov 24 (PTI) Promising to push economic
reforms, Indian Prime Minister Manmohan Singh has invited US
investors to tap "enormous opportunities" in sectors like
infrastructure, energy and agriculture, exuding confidence
that India would return to 9 per cent growth within two years.
Reaching out to the American business community, he said,
virtually all spheres of Indian economy are open for
participation by foreign investors and "no investors will be
more welcome than investors from this great country".
Singh allayed fears about any rollback of economic
reforms, asserting that his government rather plans to push
ahead on key reforms in several areas including taxes,
education, skill development and legal sector, though it might
happen gradually through consensus.
"Wherever I meet businessmen to talk of our plans for
the future, the question I am most often asked is whether
economic reforms will continue. You should have no doubt on
that score," he said Monday evening while addressing the
US-India Business council.
Singh said the growth rate that has slowed down to 6.5
per cent, is expected to get back to around 9 per cent within
two years.
"American companies interested in global markets would
be well advised to look at India," he said, seeking the US
corporates world's collaboration "as we transform India from a
low-income country into a vibrant market of over a billion
people, with steadily growing purchase power."
The council was attended by top US and Indian corporate
leaders including Pepsico Chairperson Indra Nooyi, Reliance
Chairman Mukesh Ambani, Tata Chairman Ratan Tata, ICICI Bank
MD Chanda Kochar and Bharti Group CMD Sunil Bharti Mittal.
Singh said tax reforms, especially the introduction of a
Goods and Services Tax, are a very important part of his
government's agenda, along with financial sector reforms.
"We are also committed to major reforms in education and
skill development. We have started a programme to raise
resources by sale of equity in public sector enterprises.
Legal reforms aimed at reducing delays are another priority,"
the Prime Minister said.
He underlined that the economic reforms of the past have
brought India advantages and "I can assure you that we will
continue down the road. We might do it gradually, and in a
manner which builds a consensus for change. But I assure you
we will persevere."
The Prime Minister said his government plans to push
ahead on "key reforms in several areas especially those aimed
at bringing the deficit under control while ensuring a strong
expansion in investment in infrastructure."
Replying to questions after his address, he said, India
today is open for business in almost every sphere of economic
activity.
In infrastructure and other sectors, he said, "I see
enormous opportunities for participation on the part of US
business communities, both directly and through public-private
partnerships".
Describing infrastructure sector as a "critical
bottleneck in our ambitions to realise a growth rate of 9 per
cent", Singh said large-scale investments would be required
for improving infrastructure, in modernising infrastructure,
in expanding infrastructures of roads, of railways, of power,
of urban infrastructure, ports, airports.
He identified other sectors open for foreign
participation as manufacturing, services, including financial
services and information-technology services, agriculture-
related activities, agroprocessing and agromarketing.
"So literally, today, all fields of economic activity are
virtually open for participation by foreign investors, and I
can assure you that no investors will be more welcome in our
country than investors from this great country," Singh said.
On economic recession, Singh said India, like other
emerging market economies, was affected by the crisis of 2008
and its growth rate decelerated to 6.7 per cent in 2008-09. It
will remain at around 6.5 per cent in the current year but "we
expected to accelerate from this level and get back to a
growth rate of around 9 per cent within two years."
He said there are a number of reasons why he believed the
Indian economy will resume rapid growth despite the fact that
slower growth in industrialised countries will limit its
export possibilities.
Naming the reasons, Singh said,"Our domestic savings rate
has increased very substantially and supported an investment
rate of 39 per cent in 2007-08, most of it being in private
investment. We have ample human resources in terms of labour
skills, scientific talent, and management capability".
He said India enjoyed a demographic dividend in terms of
a growing working age populations in a world that is aging
rapidly. "We have a vibrant and innovative private sector,
which operates independently of government."
Singh said rapid and inclusive growth in the years ahead
will enable his goverment to achieve its social objectives.
"It will also result in a few hundred million people entering
the Indian market for a wide range of consumer goods." PTI AKK
ANU