India Economic Summit 2014: Economy on track to get back on growth trajectory

At the India Growth Outlook session, the panellists highlighted the challenges and opportunities India faces as investor interest in the country increases. They agreed that India was on track to get back on the growth trajectory. Foreign investors were ready to give the government time. Red tape, lack of transparency, acute shortage of skilled manpower were identified as red flags.

William Danvers, deputy secretary-general, Organisation for Economic Co-operation and Development (OECD), Paris, pointed out that India is at the cusp of an economic turnaround. "Clear and consistent communication between the government and the electorate would go a long way in building trust." Danvers said that the government has sent out the right signals by communicating to the people what it is doing and what it intends do. However, the biggest threat the government faces is about living up to unrealistic expectations.        

Gita Gopinath, Professor of Economics, Harvard University, pointed out that India is at a turning point. "The inflation is down, the Rupee stable, a majority government... The stage is set for stable reforms. However, India is yet to see any substantial revival of foreign investment," she highlighted.

Anand Mahindra, chairman and managing director, Mahindra & Mahindra, was optimistic. He said that after paralysis, the country was moving in the right direction. "The Indian economy is a giant flywheel and needs a number of shoulders." Mahindra highlighted that India does not need just the big bang reforms but steady, consistent reforms. "It imperative to clean the pipes and make life easier for the small and young enterprise." He urged the government to just remove the hurdles. "We have made a 100-metre race into a hurdle race." Mahindra also said that a great pull factor for the industry to increase investment again would be if the government can give visible timeline for clearing stalled projects. "That's when we will witness revival on the ground and the investment climate shall improve."       

Ajay S. Shriram, president, Confederation of Indian Industry (CII), said that state-level reforms will be cardinal to enable maximum impact of reforms. "Clearing large backlog of projects will automatically change the business sentiment."

Meanwhile, the big bang reforms to be undertaken included incentivising manufacturing, land acquisition, labour laws and building infrastructure. "Big decisions have to be taken sooner than later. The government has to keep up the momentum." Mahindra said.