India's growth potential best in the world: Deepak Parekh

Against a backdrop of tepid global growth, no other large economy is showing the growth potential apart from India, said Parekh

India’s growth potential is the best among the fastest growing major economies and the country should grab the opportunity to corner as much global capital as possible at a time when one third of the world’s government bonds worth $13 trillion is having a negative yield, said Deepak Parekh, chairman of Housing Development Finance Corporation (HDFC) on Saturday.

The largest mortgage finance company of the country, which on Friday completed its second tranche of Masala bond offering of Rs 500 crore by selling it to Province of British Columbia, said the the world is increasingly looking at India as an investment destination.  

“Against a backdrop of tepid global growth, no other large economy is showing the growth potential that India has,” Parekh said at an event organised by Indian Merchants Chamber (IMC) on Indian Railways. However, India is still starved of capital, especially to fund projects that require large capital expenditure. At a time of negative global yields, it is an “opportune time for India to reach out and ensure it receives a larger share of long-term foreign direct investment”. Parekh also praised the present government for improving India’s investment climate.

“No doubt, improving the investment climate is not an easy task. No other government in India has made such a concerted effort to garner foreign investments than our present government,” he said, adding, “efforts towards improving the ease of doing business have been done with the key objective of raising more resources to fund India’s infrastructure and growth.”

India’s low rank in ease of doing index, which is currently at 130 out of 189 nations, can improve with recent measures such as making it easier to start a business, increased number of on-line approvals, transparent bidding norms through e-auctions for all government tendering, introduction of the Bankruptcy Code and several other micro reforms.

“... the underlying message is that India means business and the government is working hard to dispel apprehensions with regards to bottlenecks and red tape,” he said.

To compensate for the lack of private sector capex, the government has stepped in “aggressively to build-up infrastructure across a range of sectors,” Parekh said.

“While many of these projects are still a work-in-progress, there is a flurry of activity across ports, water ways, airports and smart cities. Increased instalment capacities in renewable energy have been put in place and of course, a number of initiatives in the railways to improve services are underway.”

According to Parekh, Indian Railways should monetise some of its huge landbank.

“The time has come for a careful evaluation of the railway’s assets. If resources are scarce, there needs to be greater focus on creating core assets while hiving off other assets,” he said, adding, “the railways should monetise some of its land holdings. This land may well be used for affordable housing and in turn it could bring in large resources for the railways.”