India Inc urge FM for better Investment Climate
By Sources   |   Friday, 08 July 2005, 19:30 IST
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NEW DELHI: India Inc asks the government to improve the investment climate through infrastructure development, ensuring easy access to fuel and mineral ores, and also called for financial reforms. In a meeting with Finance Minister P Chidambaram, the chief financial officers of leading business houses also pitched for a better Intellectual Property Right regime to lure more foreign investments into the country. Chidambaram assured the CFOs that the government would carry out procedural improvements and remove the bottlenecks coming in the way of investment and growth. The minister would meet the CFOs again to discuss threadbare, ways of streamlining the tax structure further to create a more conducive environment for investment. Chief economic advisor Ashok Lahiri said: "Investment will go up in 3 to 5 years. Productivity of Indian industry has improved. But leveraging productivity for further growth is limited. So investment is needed for fresh capacity." He listed a host of sectors like auto, auto components, agro-based industries, pharma, tourism and hotels as poised to witness major investments in the years to come. These sectors have the potential of creating large employment as well, he added. "The perception about India has improved and the country is being regarded as an investment destination," he said, referring to high-end and engineering sectors. Some of the Indian companies have their footprints abroad, Lahiri said stressing on ways to encourage the globalization process. Lahiri admitted that there were several impediments in the way of investments and said the country needs to speed up infrastructure development, especially in power and roads sectors. Moreover, Indian industry also needs easy access to fuels like coal, lignite and iron ore. The CFOs suggested further liberalization of rules for this purpose. Lahiri also highlighted the need to step up rural credit as a pre-requisite to foster industrial growth. "The finance minister has said that rural credit was one of his priority areas. Industry will grow better if rural credit increases." Lahiri also said there was a need to look into the regulatory architecture and the finance minister has promised to look into it. "The focus was on investment, globalization and exchange rate," he said, summing up the views of the finance minister and the CFOs. Tata Steel vice president (finance) Koushik Chatterjee said infrastructure climate must improve for large capital expenditure to take off the ground.

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