India Inc on Sunday acknowledged that economic reforms were lagging and growth had slowed down but said solutions should be found within and not as prescribed by outsiders.
Reacting to U.S. President Barack Obama’s assertion that the government must carry out “difficult” economic reforms, India Inc said the country remained a strong investment destination with strong long-term growth prospects.
Mr. Obama, in an interview to PTI in Washington, said “American firms say 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.”
Mr. Obama said, “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.”
Acknowledging that the nation lagged in reforms in sectors such as retail, aviation, defence and insurance, India Inc said Mr. Obama or any other person could not be “dictating to Indian government or Indian policymakers.”
“The U.S. has its own problems and India has its own. Our government will take decision as per our own compulsions and requirements. However, we do need reforms but Mr. Obama or any other person cannot be dictating to the Indian government or Indian policymakers,” Assocham Secretary General D.S. Rawat said.
The U.S also had lot of “limitations” like the recent restrictions imposed on BPOs. “But it is their decision. Similarly, decisions taken by our policymakers should not be questioned because our economy is still 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.”
“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 remained 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. However, it is evident that some significant reform measures have to be taken urgently. We are convinced that investor sentiment will become positive if these measures are implemented,” Mr. Kumar said.
“Recent pronouncements by the government have given a degree of reassurances in this regard.”
The CII said investor sentiment towards India was quite strong but “certain developments” like retrospective amendments to the IT Act and General Anti-Avoidance Rules had affected the mood.
“However, we know that the government would address these issues,” Mr. Banerjee said.
Keywords: India economic reforms, Barack Obama remark, India Inc, FICCI, CII
My salute to Mr.G.Hariharan, today most of the educated people think how can buy branded things from foreign countries. Forget about our Mahatma Ghandi's word, most think about the Bpo and IT companies only not about formers and retailers. There is not sufficient encourage or plans from our rulers for last 64 years. They forget another word from Ghandiji "India is depend on formers not BPO or IT". Need plan for our improvement and innovations in science,meical,defence from the school level. Thats make India and Indian's become best in the world.
President Obama is only telling India why American investment is not flowing at a rate
which both countries want. Since both India INC and the government of India want
American investment to push up economic growth rate in India, why sould they object to the
American President telling us under what conditions the flow of investments from his country
to India will be accelerated? Vinaasa kale vipareedtha budhi, isn't it?
Indian currency is trading near the all time bad rate of Rupees 57 per US dollar. The economy is unable to stop the rise of petrol price because it has to be imported using the weak rupee. Rise in petrol prices causes domestic inflation and untold hardship to the common man. Now Foreign Direct Investment helps the foreign exchange situation, improves the rupee conversion rate (remember our currency was strong, trading at about Rs. 40, only about eight years ago). At that time the climate for foreign investors was almost as good as it was in China, Brazil and Russia. After a series adverse policy changes (e.g. the rejection of FDI in retail sector) in the past five years FDI flow into India dropped perceptibly, rupee weakened, exchange rate went up, petrol prices rose and the GDP growth rate dropped from around 7.5% to about 5.5% - a downward spiral. This is not the time to play word games with President Obama – it’s time to reset the policies back to where it was.
We should simply take good things from this issue, that obviously we
need to improve upon reforms it is not like that we are perfect in this
area. Our great politicians who are simply lambasting Obama over his
comments and thus proving themselves great patriot who do not want FDI
in retails for their poor small traders, need to focus on improving the
economic conditions more rather criticizing America. Simply don't give
others a chance to mock you.
Am kind of dissapointed to read some of the reader comments, and for a change, feel happy that our politicians are at least better of in this regard !! Ever heard or something called economic imperalism ? The last time I checked, reforms did not mean selling yourself to US.
And on a different note, is it not obvious that the agencies like Walmart control US govt. so much that even Obama has to succumb to their demands and make such unwarranted statements ? Do you want that to happen even in India ?
Amazing how the industry associations are speaking against Mr.Obama's
call( this is election year for him, so he will talk like this..) for
reform in India and are now asserting that India is 'good' and
'strong' economically and shouldn't listen to Mr. Obama.
When it was the same people that used to quote foreign rating agencies
and the alleged 'GAAR' outrage for slowdown in India, called for
scraping food security plans, talked about 'policy paralysis', called
for lowering of the interest rates etc to get subsidy for themselves.
Didn't they undermine the India's sovereignty in decision making back
then, when they lobbied for the same things Mr.Obama is asking for
now?
Maybe the more competition they will face with US FDI is forcing them
to 'believe in the India's growth story'. The earlier gloom rhetoric
has changed so fast in to goody talk about India, really amazes me!!
Its really unfair to compare India to Canada, The shopping practice of
Indians and foreigner vary due to financial horizontals present in our
society
There are brands that each class prescribes to , you wont find
children of middle class going to schools in Nike shoes
In similar lines there were huge protests against introducing retail-
chain out lets like MORE, Reliance etc ,till this day there are no
reports of ordinary shops being closed due to the introduction of
these
People who shop at these places are simply different and hence one
does not become a threat to another and on the contrary they do open a
wide range of products and services.
Indian mind set towards global community need lot of bridging...where please look into the impact of globalisation in all means in all trades.We are loose our focus on our own buisness...FDI have impact over the economy only when we have the sufficient impact over them...Look into number of Brands that we always look for ...in that how many is our own brands...do we have the infrastructure to build a brand rather than allowing some branded companies to happily carry out there buisness...poor point is that there are companies manufacture product (mainly Pharma) in our land and sell it in our country which is BANNED in their own country...where we are going.
BUILD OUR BRAND AND COMPETE TRULY ONE TO ONE...RATHER BEING A SERVICE HUB TO THEM
FOLLOW GANDHI'S WORDS " BE INDIAN AND BUY INDIAN" YOU WILL BE MAKING THE REFORM..SECOND INDEPENDENCE.... JAI HIND
This is quite laughable. If you read what all the learned gentlemen who have been quoted above are saying, they are actually saying the same thing that Obama is saying - namely that India needs reforms. So it is all part of an elaborate plan to put pressure on the Indian government to put in more reforms.
And as Mr. Ashok in the comment above (Jul 16, 07:34 IST) says, such reforms need to be studied carefully before being committed to since the experience in other countries shows that it's not really a good thing. I agree with Mr. Ashok about that, but I feel he also misses out on the immense benefit the ordinary customer will get from the efficiencies brought in by big retail. The ground reality in India today is that the small store is bad for the consumer - I get a better deal from the large retail chains - better prices, cleaner products, lesser wastage, more convenience, better quality. Let 50 close down. 41950 people will benefit. Not sure of Brandon, but yes, here in Chennai.
Mr.Obama is a good man with the interest of his countrymen on his mind. But the interest of a few of his countrymen (CORPORATE AMERICA) do not coincide with national interest of India. That's the point of collision !!
Today India has got enough money to finance scientific research & innovation. We should concentrate on innovation rather than becoming a world market where everyone else (foreign MNC's) sells their third class product at exorbiant rates (called BRAND VALUE/COST). This ARTIFICIAL BRAND VALUE cost (without any new innovation) destroyed western economies & will destroy Indian economy too if allowed to flourish. Without innovation BRAND is a COST & NOT VALUE !!
[I lived in a small community of 42,000 people in Brandon in Canada.]
I lived in New Liskeard, Ontario, Canada, another northern town, this one of five thousand people. They got a Walmart too, some years ago. Yes, Walmart is evil, but the flip side of the coin is that the store created many new jobs that were not getting created otherwise. Some local businesses may have closed as a result, but others have continued to prosper. Frankly, I find your statistic of fifty closed businesses in a town the size of Brandon a little difficult to believe. Moreover, I am happy to report that New Liskeard has a new Panjabi community which has turned out to be a vital new economic force in the town. Outsiders aren't all bad, as Ashok of Brandon, Manitoba certainly knows.
Well said Ashok! They will not be allowed to India and we will not afford our people to starve because of these MNC's.
Ashok, you should have said, people should protest against FDI in retail not ask the ruling UPA not to drool over FDI in retail and learn from others exp. They will not.
Who is this India Inc.? Does Rawat speak for all of "India Inc." His is the typical Indian
response, Unless pressure comes from the outside, our Babus and Politicians will not budge.
Then there is good pressure and bad. What Obama has voiced is spot on.
I lived in a small community of 42,000 people in Brandon in Canada. It had many corner stores supporting livelyhood of a large number of its residents. After Walmart opened in this community over fifty of grocery stores, retail gas stores, small hardware stores and stationary stores closed down.People will know about the impact of leting stores like Walmart open in cities of India only when hundreds of smaller stores close down in that community.
Re; Insurance companies from North America getting foothold in India, it will be tragedy for workers in factories and industries in India as they will not get their due health benefit and will be denied help and will be left to suffer the concequences of injuries and illhealth borne out of their jobs.This is what happening in Canada and ofcourse only a handful of people have health care coverage in US.
It will be very imoprtant for our politicians, social workers and pepole in think tank to study how the country will be affected if THEY come
The same India Inc, IT bosses want US to soften visa requirements and VISA fees.
They also want dictate in selfish interest.
The headlines says it all. India is again wallowing in jingoism and false nationalism. What has this national pride to answer to the 600 million who live below the poverty line after 64 years of independence ?. Nothing but the same old jingoistic crap and nonsense. Go learn reality and the show performance. Enough of talk and talk.
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