India is the place to invest again, says Arun Jaitley

More than five months after taking charge of two important ministries - finance and defence-in the National Democratic Alliance (NDA) government, Arun Jaitley on Wednesday met the largest gathering of foreign and domestic investors at the India Economic Summit organised by industry body CII in New Delhi.

The minister not only tried to elaborate the economic agenda of the new government but also cleared the air around a range of issues that varied from the reforms agenda for the new government to dealing with corruption, opening up of sectors and India's stand at the World Trade Organization.

Jaitley said he was satisfied with the beginning the government had made. "It is a long journey," he said.

He said the second generation of reforms doesn't need one or two big-bang ideas.

"Reforms are not about one big idea. In fact, you can do damage with one big idea. For instance, retrospective taxation was a bad idea. One measure can't solve all the problems."

The minister said the challenges in front of the new government were too many.

"The pit was reasonably deep. Ratifying [those] will take time. There are large numbers of steps required. I ran out of paper when I was noting down the problems in the morning today. One has to constantly push the reforms agenda and need not get upset about obstacles," he said.

He said that in the current environment, no step should be taken that can potentially send out contrary signals.

"That's what the present government is doing."

He said that to market reforms in a developing country like India is very challenging.

The minister said the buzz about India is back now. People are watching India carefully.

"India is a place to invest again for foreign investors. Domestic companies who were looking to invest outside India are reconsidering their decisions," he said.

Talking on the issue of corruption, Jaitley said that in the past five months, every decision the government has pursued is in the direction of eliminating discretion. He pointed out that allocations of natural resources - coal and spectrum - became a defining moment against India.

On being asked whether evaluating government employees on the basis of the results they deliver is possible in the Indian context, the minister said that "it would be a daunting task."

Jaitley said the government will continue to follow the policy of disinvestment. "We are looking at some set of PSUs which could do better in private hands. A large number of PSUs are getting close to disclosure."

He also mentioned that in the last NDA regime, the government had opened up the insurance sector.

"We are liberalizing it further. The amended Bill will be passed in Parliament this month," he said, adding that the government is weighing the requirements of each sector.

"We recently opened up the defence sector. Last time, we allowed up to 26 per cent. One of our major decisions is to make it 49 per cent," he said.

"We have taken decisions to open up railways. Also, 60-65 per cent of people [in India] don't have proper homes. We need urbanization and sub-urbanisation in a big way." So, the minister said, the government decided to open up real estate sector for foreign investors.

"Earlier, the investment was restricted to only metros. We have now opened up for tier-II and III towns," the minister said.

Jaitley also said that the Land Acquisition Act has some provisions that need to be relooked at. "Urban infrastructure, rural infrastructure, affordable housing and housing for poor, all these require land. The law lays down a complicated procedure for the acquisition of land."

anilesh.mahajan@intoday.com

@anileshmahajan