The recent foreign direct investment (FDI) reforms and fuel price corrections by the ruling United Progressive Alliance (UPA) government might have drawn flak from one of its allies, but India Inc thinks these measures are good for the country and that political parties should rise above petty politics. Industry feels that any rollback of these steps would send wrong signals about firmness of the country’s policy moves.
A day after the Trinamool Congress (TMC) said it was withdrawing support to the UPA government, in protest against the reform measures announced by the government, the Federation of Indian Chambers of Commerce and Industry (Ficci) held a press conference to buttress its views on the importance of sustained reform process.
The Confederation of Indian Industry (CII) and corporate leaders such as Anand Mahindra and Kiran Mazumdar Shaw also pledged their support to these reforms. “We urge the government to stand its ground. Right-thinking Indians will be less than amused by partisan politics in a fragile economy,” tweeted Mahindra, chairman of the Mahindra & Mahindra group.
Biocon CMD Shaw, on the other hand, lambasted TMC chief Mamata Banerjee’s decision to withdraw support to the UPA. “Mamata Didi is a maverick politician who depends on the vote bank of poor people. Her economic agenda is not aligned with strong economic growth,” Shaw said.
She, however, put the onus on the Congress. “Unfortunately, the Congress and the UPA have such a huge trust deficit that even good reforms are met with suspicion,” Shaw wrote on micro-blogging site Twitter.
Ficci said India’s image will improve only if the reforms announced last week are sustained.
Last week, the government had announced a slew of reform measures such as revision in diesel prices and opening of areas like multi-brand retail, aviation and power trading to foreign direct investment.
“We urge our entire polity to stand united behind what are widely seen as positive measures which will benefit the grassroots,” Ficci president R V Kanoria said at the press conference.
When asked if the government should roll back the announcements in case the political situation pushes the country to a mid-term election, he said that it would mean as if there was no government in the country.
The secretary-general of Ficci, Rajiv Kumar, and Vice-President of Ficci, Sidharth Birla, said that the next stage of reforms should mean “ease of doing business” by reducing bureaucratic red tape. “Currently, it takes at least 17 clearances to start a business in any state,” said Kumar.
When asked about the prospective investors as very few states have agreed to the FDI in multi-brand retail proposal, Kanoria said some of these states are larger than many countries. “So, even if one state agrees, it will attract investment,” he said.
CII Director-General Chandrajit Banerjee said that opening up of retail and other sectors to FDI is a crucial step for growth as well as for capital inflows. “These reforms must stay on course and any derailment at this stage would send a wrong signal to the overseas and Indian industry,” Banerjee said.