THE EXCHANGE. The long and winding road

The past 45 days has seen roller-coaster rides. India was mostly on an upward gradient but the delicate part as always is to make it continue that way, through a possible dip.

Prime Minister Modi’s visit to US has reinforced India’s geopolitical and economic perceptions. Finance Minister Jaitley’s meetings with investors in Singapore and Hong Kong generated positivity. Various ministers made positive impacts speaking at the UN, the US, or in economic statements nearer home.

RBI Governor Raghuram Rajan has cleared the decks for another reduction in interest rates by banks -- maybe driven as much by positive trends on the inflation front and its opposite in business.

Despite growth, a combination of depressed consumer demand, excess capacity and stressed financials keeps domestic private investment elusive. In the interim, public investment and FDI must provide momentum; the government has released large tranches of project funding and the increasing trend of FDI will hopefully play its due role.

Improving the health of banks is also on a priority list. A strong banking sector must be a true partner of industry. Foreign investors are usually quick with their counsel on what the government should do.

However, in most recent interactions with the Prime Minister and Finance Minister there has been appreciation of the government’s approach and suggestions were minimal. The key message instead has been “to go faster” implying that execution is far more important than formulation.

This is no different from what Indian enterprise wants. Of course, the long tradition of being deferential to authority results in enterprise at large being self-restrained, but true engagement calls for more forthright, constructive and well-timed articulation. Lamentation serves no useful purpose.

An obvious area of concern for investors - domestic and foreign, existing and prospective - is the unintended outcome of our legislative design and drafting. As seen in many areas -- ranging from corporate laws to tax legislation to others -- the intent and substance of commercial laws can differ. Confidence suffers as a result, and this can materially deter many potential medium sized players from abroad.

Are our laws so complicated or hard to abide by? This really reflects our efficacy in law making. A disproportionately long judicial pendency makes it imperative for investors that ambiguities and resulting disputes are minimised.

Can new laws and rules be more end-purpose-driven? We need an enhanced balance between domain-knowledge and empowerment (of drafters) to avoid disconnect of the written word from true objectives.

A year after introduction of Make in India and 9 months after drawing up specific action agendas, the Prime Minister intends to review progress. Meanwhile, we also have encouraging news via independent ratings on ease of doing business in various States as well as a climb in country competitiveness rankings. But we still have much way to go in reinforcing factors of production (which need much reform and proactive effective governance) for our manufacturing ambitions to be realised.

We have thrown open global access to markets. In times of slowdown inflow of goods from abroad become a real threat to local manufacture. China continues to cast shadows on many key industries, more so as Chinese enterprises enjoy covert (or even overt) state backing and minimal pressure for accountability to a wide set of stakeholders.

Start-ups are the current rage. But we do not see any brick-and-mortar or manufacturing start-ups, whether in the large or MSME sectors. Current start-ups revolve around service-oriented or e-commerce where business models can bleed capital at rapid rates without a predictable end, and yet attract resources. The key brick-and-mortar issue is that promoters have neither freedom nor sufficient patient capital backing to afford long burn-rates.

The key reason for global interest in India is that we are the geopolitical and growth “sweet-spot” in an otherwise gloomy environment. Investible funds are not a real problem abroad and other nations have ageing populations that don’t create compulsions for large job creation.

So, an easy choice for a manufacturer can be a venture that leverages access to our domestic market. The choice in making India a part of a global supply chain is perhaps a distant second at this time.

During his US trip, the Prime Minister hinted that India is “heaven” for investors. In terms of its potential as a place to earn good returns, it undoubtedly is.

But — respectfully — it is not yet a heaven that easily stimulates investment-risk appetites that India needs. It is crucial that India earns investor confidence through clear signals on competitiveness and speed and certainty. Just growth differential with other jurisdictions is not a clinching factor.

Almost every area can be tackled via time-bound executive action. Senior government officials in the Centre and States are tuned to national development needs but accelerated transmission of intent to, and strict monitoring of, operating levels is required. Elimination of a “control” mindset requires exertion but much can also be achieved by imposing accountability down the line and expanding the range of digital interactions.

Six months into the current financial year, the government must consider articulating a mid-term practical action plan for the remaining six. The domestic sector must see convincing evidence that GDP growth can translate into real economic returns.

Rome was not built in a day. But its builders were also not faced with the opportunities and social compulsions (job creation) of present-day India. This makes our combined task — as government, business and society — immensely more demanding. Speed through executive action and accountability must now be put on equal footing with policy reform. The navigation to heaven continues to be tricky, even if we are on the right road.

This column explores ideas and opinions on Indian enterprise and economy. The writer is an entrepreneur and former president of Ficci. The views are personal