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Lauding Narendra Modi for being a Prime Minister who leads from the front, industry leader Deepak Parekh has said the new government has created a "feel good wave" but time is ticking fast to covert this euphoria into "real changes" on the ground.
Known for speaking his mind, Parekh said that if real changes are not seen on the ground then India might well lose the chance of becoming a preferred investment destination.
"We are riding a feel good wave and we are lucky that it has lasted so long. But time is ticking fast... The progress of this new government is being increasingly scrutinised and living up to the built-up expectations will not be an easy task," Parekh, who is Chairman of mortgage lender HDFC, said.
While speaking at an ISB capital markets conclave here over the weekend, Parekh was referring to positive sentiments in the investor community after the Modi-led government came to power in May this year.
Listing out positive changes in recent times, Parekh said the new government is perceived as being able to deliver on growth, which is driving the present euphoria.
According to him, India has a Prime Minister who leads from the front and key macro fundamentals are working in the country's favour, but there should be changes on the ground to be seen.
"... If one does not see real, physical change on the ground, pipeline projects actually taking off, new jobs being created and faster decisions being made on policy issues, we may well lose our chance of being a preferred investment destination," Parekh said while asserting that India cannot afford such a situation.
"We have to stay in hope that things will really turn around. I for one still believe that India's best days are still to come, and come it will," he added.
Even though capital markets play a very crucial role in supporting inclusive economic development, Parekh said it cannot be denied that "the optimism and enthusiasm on India today is perhaps more with foreign investors than domestic ones".
Presenting a grim picture of retail side of the Indian capital market, he said that their direct participation is 1.4 per cent of the population whereas the same is at 9.4 per cent in China, 16 per cent in the UK and 18 per cent in the US.
This shows woefully low financial inclusion in the India growth story, he added.
Noting that increasing retail penetration requires a big thrust of investor awareness at the grass-root level, he said it is the FIIs who are really benefiting from the country's well-regulated equity markets.
According to Parekh, it is estimated that over the past one year, net FII buying of Indian equities exceeded domestic buying by a ratio of 10:1.
