The Government has sought to put to rest some of the concerns that the reform process will get derailed after the BJP’s loss in Bihar elections. To an extent, it succeeded with industry chambers welcoming the foreign direct investment reforms announced on Tuesday.
In order to boost investment, the Government announced FDI related reforms and liberalisation’ in 15 sectors of the economy.
ASSOCHAM’s Secretary General D S Rawat said that the liberalisation in a host of key sectors like defence, civil aviation, retail, banking and e-commerce a couple of days before the Prime Minister Narendra Modi’s visit to the UK will sent a huge positive signal to global investors about the focus returning to the economic agenda after the Bihar elections.
“At a time when the risk capital by way of equity is hard to come by over-leveraged domestic companies in important sectors of the economy, foreign direct investment is the best option to look for,” Rawat added.
Terming the FDI reforms announced today, as being “among the most sweeping and forward looking”, Sumit Mazumder, President, Confederation of Indian Industry (CII) said that “this is an emphatic message from the government that the reforms process is on track and we can expect more of such bold moves in the times to come”.
Meanwhile, the Federation of Indian Chambers of Commerce and Industry’s President Jyotsana Suri said that the FDI reform announcement is an affirmation of the Government’s commitment to strengthen the economy and generate more jobs.
“The Government has been laying the foundation for strong and sustainable growth that India needs. Simplification of procedures for foreign investments, putting more sectors on the automatic route, introducing fungibility between FDI and FII and having a single reference document for FDI related guidelines are steps that would boost investor confidence further,” she added.
CII's Director General, Chandrajit Banerjee said, “This is a clear and strong message that reforms are not only on track but are going to be aggressive. For the markets and for the industry these could not have come at a better time.”