India Inc urged to boost investments

The impact of global events on the Indian economy will be far less because the fundamentals are reasonably strong

New Delhi: Prime Minister Narendra Modi on Tuesday asked the industry to take risks and step up investments especially in job-creating sectors as the government looks to perk the economy by boosting spending and attracting global capital with improving ease of doing business.

In a meeting with the industry and business leaders, bankers and economists, the Prime Minister discussed how to convert the global turmoil into an opportunity. He felt its impact on India would be far less while India Inc favoured an interest rate cut to bringing down cost of funds.

In a nutshell, the participants at the three-hour long meeting analysed the recent global events, their impact on India and the opportunities in-built in the situation for India, Finance Minister Arun Jaitley informed the reporters after the interactive session.

He said the participants, 27 of whom spoke, felt the global situation, especially the volatility in the capital and currency markets, is a transient phase and that steps should be taken to strengthen the real economy.

RIL Chairman Mukesh Ambani, Tata Group head Cyrus P Mistry, Aditya Birla Group head Kumar Mangalam Birla, Sunil Bharti Mittal of Bharti Airtel and ITC chief Y C Deveshwar were among the industry leaders who attended the meeting.

Also, the RBI Governor Raghuram Rajan, ICICI Bank CEO Chanda Kochhar and SBI Chairman Arundhati Bhattacharya and economists like Subir Gokaran and Chief Economic Advisor Arvind Subramanian as well as Niti Aayog vice chairman Arvind Panagriya were also present.

Referring to industry's demand for interest rate cut, the Finance Minister said it was the domain of the Reserve Bank to set monetary policy. The meeting felt that the impact of global events on the Indian economy will be far less because the fundamentals are reasonably strong, Jaitley said adding that therefore they wanted steps in the direction of further strengthening the Indian economy.

"What we are looking at is different steps to strengthen the Indian economy," he said. The steps, he said, will range from investment in infrastructure, irrigation, easing doing business, attracting more global investment, generating private sector investment in India.

"These are the various steps which we are taking. So in this situation the best option for India is to strengthen our basic parameters... We are concentrating on strengthening the economy as a whole and how to convert it into an opportunity," he said.

Boosting infrastructure spending as well as concentrating on agriculture sector was key to strengthening the domestic economy in the current scenario, he said adding an improvement in the agriculture sector would enhance the purchasing power of a large number of people.

Increased expenditure on irrigation, emphasis on food processing, expediting the investment procedure for infrastructure creation were the other suggestions made at the meeting, he said.