India Inc, your turn to keep the promise
ET World Leaders Forum on Saturday, Prime Minister Narendra Modi assured business of a stable policy environment to facilitate innovation. Policy facilitation and business disruption will, indeed, be required in equal measure to accelerate India's development over the next two decades to capitalise on its demographic dividend. Indian companies need to grow much faster than they are accustomed to, so that the economy makes productive use of its immense work force.
India Inc will have to diversify into markets beyond the country's shores to be able to outgrow domestic consumption. The potential growth rate of the economy can increase only if manufacturing and services exports become the mainstay of corporate India. Acquiring this status involves a quantum jump in corporate investment.
GoI has cleared the pipeline for household savings to flow to producers, and is working to enhance international capital flows.
GoI has demonstrated its capacity to live up to its end of the bargain Modi is offering business. India has not lost its momentum despite global supply shocks that have slowed the world economy. Monetary policy has been fairly successful with inflation control while accommodating growth.
There is a credible commitment towards improving the fiscal balance. The rupee has been in an orderly descent during and after an intense spell of financial market volatility.
More than a steady hand on the macro rudder, GoI has read the changing global scenario to pitch India as a base for global manufacturing. This involves offering export-linked incentives to foreign investment in specific industries while raising the competitiveness of local manufacturers.
