'Resilient India' woos investors

"While globally, it is still a challenging environment, for India no major storms are ahead," Swaminathan Aiyer, Consulting Editor of the Times of India Group, said while making the key note address at the "Emerging India Forum."

Dubai: India is resilient and "standing tall" in spite of a slowing global economy and amid the 'chilly winds coming out of China", leading financial experts and industry leaders said as they hailed the third largest Asian economy's budget for 2016-17 as a decisive step forward to ensure fiscal consolidation and sustainable growth of more than seven per cent.
"India's micros are stronger now. It has become a natural choice for destination investment for global investor community," experts pointed out.
"While globally, it is still a challenging environment, for India no major storms are ahead," Swaminathan Aiyer, Consulting Editor of the Times of India Group, said while making the key note address at the "Emerging India Forum."
Hosted by Times Now, India's leading English news channel, and the Institute of Chartered Accountants of India (UAE Chapter) the event was held on Saturday night at Dubai Men's College.
Describing the budget presented by Finance Minister Arun Jaitley as a forward-looking initiative promising long-term progress for the country, Aiyer and other panellists, including Dr Shubhada Rao, group president & chief economist, Yes Bank, agreed that "India is resilient and ready for global investors". This year's focus on the rural economy and stimuli for agro policies would go a long way in creating the groundwork for a stable overall economy, they said.
Applauding the move for privatisation or "asset recycling" as vital step to expedite on-going massive infrastructure expansion programmes, Aiyer noted that Jaitley had scored on several fronts.
The budget has given a big boost to confidence levels of citizens and investors by making in clear that the government means business, he pointed out. "The International Monetary Fund has described the Indian economy as standing tall, shoulder to shoulder with the American economy," said Aiyer. "In the late 60s, India depended very heavily on foreign aid. Today, even after two consecutive droughts, the Indian economy has emerged resilient despite a chilly global economic scenario. I am confident that the initiatives mentioned in the budget has the right initiatives to control fiscal deficit."
Aiyer also pointed out that the current budget was expected to be harsh, in keeping with the trend. At the same time, he also voiced his disappointment on the lack of uniform rates on excise duties on all items. "However, the government has focused on the right growth areas such as rural economy and infrastructure to prepare a stronger financial structure," he said.
"The tax administration reforms are extremely positive. The emphasis on making the tax administration much easier will help reduce disputes and litigation while ensuring speedier bankruptcy procedures. There is also a commitment to 'no-retrospective' taxation, which I hope is fixed," said Aiyer.
The emphasis on fiscal prudence is equally positive, he said. "Sticking to the fiscal target is extremely positive. There is a sense of a direction for a number of things, and there is a sense that apart from individual speeches, we are getting a follow through."
"The one thing which to my mind was too incremental was this reduction in the corporate tax. If you are trying to get it down to 25 per cent, two budgets from now, what you have done this year is too little. That particular phasing should have been a little more aggressive," Aiyer said.
On the Indian currency's performance, Aiyer said "rupee depreciation is not a solution. You have to improve productivity." He pointed out that while almost all Asian economies that formed a value chain around China went down, India escaped the slowdown as it was not part of that chain. Dr Rao said the new budget has accorded greater priority to macro stability over growth, by sticking to the fiscal deficit target of 3.5 per cent.
"The Finance Minister has chosen to empower the masses and strengthen the 'bottom of the pyramid' through the nine identified pillars and the specific focus on 3Rs - Rural, Rail, and Road. From the perspective of overseas investors and the NRI community, specific measures such as 100 per cent FDI in food processing, rationalisation of TDS (tax deduction at source) for NRIs without PAN, easing of customs declaration and increase in baggage allowance are key positives. India's economy can be seen as oasis of investment opportunities," she said.
"With the government's continued focus on economic reforms, creating world-class infrastructure and ease of doing business, I am certain that India will offer bigger direct and indirect avenues of symbiotic growth to its strategic economic partners such as the UAE in the coming year," Dr Rao added.
Experts and panellists said the budget had the potential to usher in major changes in the Indian economy even as many other countries were witnessing little or no growth. At the same time, the budget is likely to have a huge impact on GCC companies doing business with India, they pointed out. "India has been focusing on attracting foreign companies and investment. Finance Minister Jaitley announced various measures aimed at making the "Make in India" vision a success and further boost the country's economy," speakers pointed out. They also debated on the budget allocations for the Narendra Modi government's initiatives aimed at foreign investors, including Make In India, Digital India, Skill India, Clean India and Clean Ganga and Startup India.
Speakers agreed that the measures outlined in the budget would likely have an impact on businesses and its economy of the Gulf region. The GCC exports to India have grown at an annual rate of 43 per cent over the past decade, the highest rate with any major trade partner, making up 11 per cent of the total GCC exports.
Nimish Makvana, chairman of ICAI, said the budget opened a new door of partnership between The Institute of Chartered Accountants of India - UAE (Dubai) and Times Now. Naveen Chandra, head of International Business for Times Television Network, said the annual budget presentation is a milestone event in India's progress to become an economic superpower.
- issacjohn@khaleejtimes.com