India currently features among the top two investment destinations globally, and the momentum needs to be maintained, Naina Lal Kidwai, former president, Ficci and country head and CEO, HSBC India, told HT in an interview. Excerpts.
The NDA government is a year old. How do you rate its performance?
I believe what we have is a pretty decent report card. On the global stage India features among the top two. One year is too short to brand India as an attractive investment destination, but the build-up has happened and now we need to maintain it. To improve the ease of doing business, states must also chip in and respond.
What should be the focus now?
The goods and services tax (GST) is critical, and we hope to get it approved. It pushes our GDP. The focus has to be on sectors such as infrastructure and services. For example, look at tourism. Why are we not having more tourists? Where are the Chinese tourists who are traveling around the world? Why are they not coming to India? Water management is also another critical area. We have rivers all across the country but India is shamefully mismanaged when it comes to water — whether it is for drinking or irrigation.
Which are the areas that have been addressed?
Fuel subsidy has been handled well but we need to manage it even better. We need to tax bad fuel. Pollution needs to be addressed. The cost of pollution could be really high, and when you handle this you get a clean environment, which in turn helps us in leading a disease-free life. Swachh Bharat Abhiyan is one of the best programmes. It will lead to a more healthy and effective workforce. To make the programme a success, it is important to engage local communities and non-governmental organisations.
Credit demand is still weak and interest rates are high. Why is it so considering that inflation is down?
Industry needs low interest rates. The Reserve Bank of India did cut (policy) rates but the transmission from banks is yet to happen. As long as the level of non-performing assets is high, it would be a little difficult. Interest rates depend on multiple functions. Now to ensure that in a systemic manner, we need to look at our bankruptcy laws. Before a company gets into the ICU, you need to address the situation. Satyam case is an ideal model. Because the government acted so swiftly and it was such a co-ordinated effort, we retrieved the situation in a commendable manner. But it is not possible to do so for every company – small, medium and big, so we need a proper mechanism in place including revisiting the SARFAESI (The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest) Act.
The Opposition has called the government pro industry, especially on the issue of the land acquisition bill. How important is that for growth?
The bill is a very difficult bill. The industry does not get land very easily or at a throw-away price. It is not pro-industry.
Several listed companies are placing family members on board just to comply with the norm of having atleast one female director. Do you think it defeats the purpose?
Even if a women (from the family of the promoters) comes forth and takes a position on the board, it is better than having no women representation.
What initiatives are you taking to promote women in the workforce?
We, at Ficci, have already trained 50 women who could take board position as independent directors for mid-sized firms. It is an on going process.