I remember the day the Prime Minister (PM) said that
animal instincts will be unleashed - I was wondering when it will happen. I'm so glad that the PM has finally taken the bull by the horns.
Foreign direct investment in retail has been
a long-pending demand of industry; the greatest entailing advantage being large employment opportunities that it can create and this has been proven globally.
The government has shown nerves of steel by taking a tough stand on policy and Finance Minister P. Chidambaram's assurance that a rollback will not happen is heartening.
The
cash reserve ratio reduction by 0.25 points will inject liquidity into the system and improve market sentiment.
The proposed stake sale in select public sector undertakings is expected to garner about Rs 15,000 crore.
There is a new feeling of hope and positivity. The government must work towards creating a system of faster regulatory clearances and accountability of on-time project completion.
Growth and inflation both need to be addressed on
war footing for inflow of funds - domestic as well as overseas.
One of the most critical elements for success is timing. The government has acted late, but in coalition politics, decisions that satisfy all stakeholders are not easy to come by.
The first part of policy paralysis seems to have been addressed.
However, there are larger questions - what about
delays in environmental clearances that affect launch of projects? A good fiscal booster gets nullified by increase in capital expenditure costs if regulatory permissions take time.
I cannot recall a single infrastructure project in India that has been completed on time and not overshot costs. However, it is never too late.
India's private-public partnership programme for infrastructure is the most ambitious in the world. Private investment in infrastructure was 30 per cent in last Five-Year Plan.
In the current plan, private investment has been increased to 50 per cent ($500 billion). From where private companies will raise resources? Infrastructure projects have negative cash flows, low returns and high leverage. If you look at debt, large players are already highly leveraged.
Then, who will invest? Private equities don't have the patience for these kind of projects.
Unless anyone sees a 20-per cent return on equity, they will not invest given the risks in the pipeline. So you have a conundrum. We still can hope for eight to nine per cent growth in the future if the pace of reforms is accelerated.
Harsh Goenka
Chairman, RPG Enterprises
(As told to
Business Today's Suman Layak)
RPG Enterprises Chairman Harsh Goenka 
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