Top financial administrators from India's finance, commerce and external affairs ministries need to coordinate among themselves to hammer out an efficient system of policy-making that is aimed at attracting greater FDI, leading global business advisor Ram Charan said on Saturday.
"In India it is important for three ministries-finance, external affairs and commerce & industry- to co-ordinate more, in active collaboration with the Reserve Bank of India," Charan told delegates at the HT Leadership Summit.
Charan, a highly sought-after business advisor and solution-maker, was speaking at a session on 'Leadership in Economic Uncertainty'.
"No country can really grow without having FDI, because it brings in the capabilities," Charan said. "It is important for India to make it clear that it is not going to have inconsistent policies."
The expert also said that India's policymakers should wake up to concerns about a growing trade deficit, especially with China. "India's very large concentration of trade deficit with China can worsen in the coming years. This is not a good sign," he added.
"Those who have the money call the shots. We need to set a target for achieving a positive trade surplus. That is really going to put us on the world economy's map," he said.
Charan, who has worked behind the scenes with top private firm executives for more than 35 years, also said that India needs to focus on the growth of small and medium enterprises, which form the core of the country's manufacturing sector. "We need to ask whether we are focussing enough on small and medium enterprises, because these are the ones that are going to generate additional employment. It is important for us to nurture these enterprises," Charan said.
Well known for providing advice that takes into account the real-world complexities of business, Charan said that the size of the world economy is $70 trillion and, despite the slowdown, it would grow at 3% a year - adding about $2 trillion.
"The bigger question to ask is, who is getting a greater share of that $2 trillion," he said. "Less than 100 people have caused the financial meltdown. There is a growing need to see the world through multiple lenses."