Australia's lukewarm reception to Jaitley raises doubts over investment

As the Australian visit of India's Finance Minister Arun Jaitley enters its concluding phase, a section of the media here is already lamenting the tepid reception given to him, while also doubting if he can inspire big Oz funds to invest in India.

"His visit to Australia this week should have aroused comparable excitement to that of the visit of, say, the premier of China (second in his nation only to the president) or the vice-president of the US," well-respected media commentator Greg Sheridan says in his The Australian column.

Greg Sheridan considers Arun Jaitley as "...one of the two dozen or so most important people in the world right now" in his endeavour to highlight the fact that the Australian business and investment community has missed an opportunity to engage a leader who is presiding over what is definitely the world's fastest growing large economy.

"He is the second most important figure in the government of India, after Prime Minister Narendra Modi, and India is the second biggest nation in the world, after China," Greg Sheridan writes while mentioning Arun Jaitley in his column published in The Australian Saturday.

It is, of course, too early to say whether the cash-rich Australian superannuation funds would invest in India's infrastructure or not. But if the overall indifference to Arun Jaitley's visit is used as a gauge, the Indian infrastructure project managers should look elsewhere.

The reported apathy of both the business and political communities strengthens the age-old belief held by India's diplomatic circles that the Australians are simply not interested in India.

"Indian Finance Minister Arun Jaitley's visit to Australia offers a genuine platform to lift the game and to take forward the strategic partnership that both governments committed themselves to when Prime Minister Modi visited Australia," Ambassador Amit Dasgupta, the former Indian Consul General in Sydney, wrote in an article in South Asia Monitor earlier this week.

Amit Dasgupta, who is the head of SP Jain School of Global Management in Mumbai, says that the "forward surge" has failed to materialise so far as the Australians have an inherent "conservative and risk-averse attitude towards new markets".

It was evident Jaitley encountered a general lack of interest when he addressed a series of meetings with top superannuation funds here such as Sovereign Fund, Australia Post Super Scheme, Construction and Building Industry Super, Emergency Services and State Super, and Energy Industries Superannuation Scheme.

He also met Peter Costello, who was the treasurer in John Howard's Liberal Government and is now chairman of Future Fund, in as a part of his busy schedule in Melbourne Friday.

It would be relevant to mention that it was Costello who introduced theGoods and Services Tax (GST) regime in Australia in July 2000. There is a possibility that probably the greatest supporter of GST in Australia would have expressed concern over the ongoing political imbroglio in India.

Like other parts of the industrialised world, there are a number of business managers down under who are reluctant to consider India as an investment destination as the South Asian country has failed to reform the tax system.

What makes Jaitley's mission to woo the Australian superannuation funds almost impossible to accomplish is the fact that the socio-political developments in India are monitored closely here in Australia.

The perception that Modi government is struggling to press through various economic reforms is not oblivious to the powerful fund managers who control close to 2 trillion Australian dollars. Jaitley, however, has expressed optimism about Australian funds investing in India.

"The investors who have invested in India have a good story to tell," the Indian finance minister told Greg Sheridan while emphasising that foreign investments in India have gone up by a whopping 40 percent in the last one year.

"Our infrastructure needs are very large; so are our investment needs. Pension funds are an important investment provider. They also are looking for stable and high returns."

By Rekha Bhattacharjee

(The author can be contacted at [email protected])