The Hinduja Group, with a global presence in core sectors like oil and gas, automotive, power, information technology (IT), banking and finance, on Sunday announced a major foray into the real estate sector in India, involving an investment of up to $15 billion.
Just back from a visit to India, Group Chairman S P Hinduja said here that the Indian economy "with its underlying strengths could become a beacon of hope in an otherwise bleak global environment."
The Group has acquired a landbank of over 3,500 acres in metros like Mumbai, Chennai, Hyderabad and Bangalore for development of integrated residential and commercial townships, SEZs, with hospitality, healthcare and related facilities, he said.
These projects will involve an investment of $10 billion to $15 billion over the next five years, according to Hinduja.
The group was also looking at a portfolio of 10,000 Mw in the power sector in the medium-term, he said. Implementation of a 1000 Mw project is already under progress, Hinduja said.
Expressing optimism over the state of the Indian economy, Hinduja said its fundamentals remained strong and it had the potential to bounce back to high growth of eight to nine per cent a year. "The slowdown currently experienced by the economy is largely due to external conditions and not, as a section of the business community and media say, by coalition politics, lack of leadership, corruption etc," he said.
Hinduja said the ruling and opposition parties in India were united in their resolve to reverse the present deceleration of growth momentum and make India more competitive in the global economy.
He also noted that India continued to enjoy great credibility in international forums and among global leaders, "which is a major plus."
The leading UK-based industrialist said that non- resident Indians (NRIs) continue to repose confidence in the country with their remittances touching around $60 billion last year, the highest for the developing countries, including China.
He is also confident that India will go for more of economic reforms and liberalisation and will not revert to a state-led model.
Hinduja noted that India had plans for investment of $1 trillion in developing its infrastructure in the next five years.
"It is a win-win opportunity for India and the developed countries. The investment in infrastructure will help in poverty alleviation in India and acceleration of economic growth and jobs creation in the investor countries," he said.
He said India can leverage its rising international status to mobilise investments in the country by foreign investors and NRIs to meet the government's target.
He said the investment priorities should be rural, semi- rural/urban areas.
"This will create employment opportunities where they are needed, helping alleviate poverty without distribution of subsidies, gifts and donations. The consumer market will be enlarged, contributing to increased production and economic growth," he said.
At the same time, Hinduja underlined that one of the conditions for awarding mega projects should be building up of social infrastructure in education, healthcare, water supply etc in adjacent semi-urban or rural areas.
He also demanded that the government should reduce the large number of permissions required for starting up industries or infrastructure projects.
"The key in this regard would be to organise all central, state and local level clearances before the projects are awarded to investors. This would reduce corruption and ensure speedy and timely completion of projects," Hinduja said.
He also said the Indian bureaucracy should be "sufficiently galvanised" with accountability and rewards. "The concerned government departments should monitor the projects with a Project Implementation Review Chart having time-lines for completion of different phases of the projects. An incentive scheme should be in place for rewarding the government officials for timely completion of projects," he said.
Hinduja also highlighted the challenge faced by India from the menace of corruption and black money. "The main causes of generation of black money have been the requirement for funds to meet the expenses of political parties and to fight elections at local/state/national levels; the need for making illicit payments to secure government contracts and influence government policies etc," he said. "This is a cancer which must be addressed. Unstructured, non-institutional political funding is the root of corruption in India. Electoral reforms may be introduced to regularise and make political parties accountable for funds received," he said. He also said that state funding of political parties' election expenditure can be part of a large scheme of political, electoral and taxation reform to stop the flow of money into parallel economy. He pointed out that many developed countries have opted for 20-30 per cent tax to make black money stashed abroad accountable. "India could also consider entering into similar agreements with foreign countries so that the unaccounted wealth abroad can come to India and taxed. Such funds could help reduce India's burgeoning fiscal deficit," he said.