Absence of conducive policy keeps investors away: Kochhar
Noting that investors are shying away from committing investments in India for want of a conducive policy environment, senior banker Chanda Kochhar Tuesday said that operating scenario should not be changed mid-way when investment commitments are being made.
New Delhi: Noting that investors are shying away from committing investments in India for want of a conducive policy environment, senior banker Chanda Kochhar Tuesday said that operating scenario should not be changed mid-way when investment commitments are being made.
Kochhar, head of the country's largest private sector lender ICICI Bank, further said that the domestic as well as foreign investors were fully convinced about India's growth potential, but the decision-making process was required to be made faster, simpler and more effective.
Speaking on the issue of 'Ensuring Growth in the Post Crisis Global Economy' here, she said that "suitability and a more respected day-to-day decision making, in my view, are better triggers to change the mood and kick off investments, while we handle bigger political debate."
The government has faced criticism from some segments in the past few days after the Union Budget for 2012-13 proposed a retrospective amendment to income tax regulations to bring under tax net all overseas transactions involving Indian assets, a move largely seen as triggered by a recent court verdict in the Vodafone case.
Without mentioning Vodafone case, or giving any specific example, Kochhar said: "Some changes that we tend to make with retrospective effect and so on ..."
"If I were to identify, India should focus on catalyzing investment as well as on the path of fiscal consolidation," she said, while stressing on the need to "create a conducive environment for investments".
Kochhar was participating in a panel discussion along with Commerce and Industry Minister Anand Sharma and IMF chief Christine Lagarde.
"The fact (is) we are growing at 6.9 percent. One way of looking at it is to feel happy and satisfied. But the other way to look at it is that the potential to grow is 9 percent and we are doing 6 percent," she said.
"We need to get the investment side moving. It is not as if corporate sector in India, or for that matter, foreign investors abroad are not convinced about potential of India.
"Everybody is convinced about the potential in the medium term and the long term. But today, investments are not committed either from domestic side or foreign side because of the policy environment," Kochhar said.
Late last year, various industry leaders voiced their concern about a perceived notion of policy paralysis and had stressed on the need for a faster decision making process.
Kochhar also said that it was important for investments to get moving and speed-up the executive level decision making process, so that projects and investments get completed and not get stuck during implementation.
She further said the uncertainties around the operating environment required to be removed.
Besides higher FDI levels and other big sectoral reforms, the attention was required to make "the day-to-day operating environment more conducive, decision making simpler, faster and effective," she said.
Acknowledging that India allows much more FDI than countries like China, she asked: "Why are not so many investments taking place in those sectors?"
"... we have to focus on looking at projects, making sure whatever is needed to complete those projects gets done and as the projects get started, we do not change operating scenario while investment commitments are being made," she said.
"So, stability and more respected day-to-day decision making in my view are better triggers to change the mood and kick off investments while we handle bigger political debate," Kochhar added.