Indian companies on Wednesday gave a thumbs-up to the government’s recent reform initiatives, saying that the Centre needs to follow up with other similar steps.
“To me, this is a start, what is also needed besides implementation of the policy announcements is decision on GST (Goods and Services Tax), passing of the land acquisition and food security bill and solving coal linkages problems to give a fillip to the power sector,” said Harsh Goenka, chairman, RPG Group.
“Now that the government has taken the bull by the horns to take bold decisions, they should bring in a slew of measures and look at what is right for the country and manage members of the coalition.”
The cost of capital is high and many infrastructure projects have been stuck because of environmental and other regulatory clearances and is transparency in policy and reduction of interest rates is needed to give impetus to infrastructure sector.
Giving a fillip to the reform measures, foreign institutional investors (FIIs) have put in around R9,000 crore in equities and the Sensex has surged 1,300 points in the last one month.
“These are steps in the right direction and have improved sentiments, but we need more reforms such as opening up of the insurance sector, introduction of GST and reducing fiscal deficit,” said Keki Mistry, chief executive officer, HDFC. “Cutting subsidy on diesel prices may be painful in the short term but is good for the Indian economy in the long term.”
Investors will return in India if the government continues with reforms because fundamentals of the economy have not change, said Mistry. “For institutional investors, fundamental of the Indian economy have not changed. We are still a young country.”
“The steps taken by the government in the last one month, especially in retail FDI, would prove to be a catalyst required for growth in the current scenario,” said Brotin Banerjee, CEO, Tata Housing. “The retail sector in India was facing problems relating to supply chain management, human resources, real estate and technology which would be addressed to certain extent due to new investments.”