The Indian economy needs confidence, confidence, confidence to attract domestic and foreign investment. Indian government leaders in economic areas need to make policies and implement them to earn the confidence of investors for a higher short-term, medium-term and long-term growth rates. More domestic investment capital will stay at home and foreign liquid, financial and direct investment capital will move in with the increase in the degree of confidence investors perceive for each of the three time horizons.
Deputy Chairman of the Planning Commission Dr. Montek Singh Ahluwalia, Finance Minister P. Chidambaram, Commerce and Industry Minister Anand Sharma, Corporate Affairs Minisster Sachin Pilot, Power Minister Jyotiraditya Madavrao Scindia and others are making rounds of New York and Washington, D.C. in the summer of 2013 jawboning the positives of India to American government, industry and investors.
Apparently the US government, industry and investors want more from India to risk their capital in India in the expectation of a higher return and bigger markets than elsewhere. So how could India do that?
In a paper titled " India's Democratic Economic Transformation" in Challenge magazine of September/October 1996 I had identified the following to attract capital and to build confidence. To attract capital I had suggested to get foreign portfolio investment, foreign direct investment, reforms and integration of capital markets, accessing external bond and equity markets, and sourcing external capital markets generally. India has done much of it, perhaps excessive bond market borrowing as the trade and budget deficit have been financed with external capital by government and industry.
Servicing credit of curse requires a stream of income from exports and open capital markets. This where India has a lot of work to do in making the economy competitive in terms of quality of goods, variety of goods and services, cost, and a friendly business environment.
Jawboning ad good public relations can help but open trade and real competitive advantage are the fundamental long-term factors that will build sustained confidence of global investors, including significant American industrial and portfolio investment, in India.
Deputy Chairman of the Planning Commission Dr. Montek Singh Ahluwalia, Finance Minister P. Chidambaram, Commerce and Industry Minister Anand Sharma, Corporate Affairs Minisster Sachin Pilot, Power Minister Jyotiraditya Madavrao Scindia and others are making rounds of New York and Washington, D.C. in the summer of 2013 jawboning the positives of India to American government, industry and investors.
Apparently the US government, industry and investors want more from India to risk their capital in India in the expectation of a higher return and bigger markets than elsewhere. So how could India do that?
In a paper titled " India's Democratic Economic Transformation" in Challenge magazine of September/October 1996 I had identified the following to attract capital and to build confidence. To attract capital I had suggested to get foreign portfolio investment, foreign direct investment, reforms and integration of capital markets, accessing external bond and equity markets, and sourcing external capital markets generally. India has done much of it, perhaps excessive bond market borrowing as the trade and budget deficit have been financed with external capital by government and industry.
Servicing credit of curse requires a stream of income from exports and open capital markets. This where India has a lot of work to do in making the economy competitive in terms of quality of goods, variety of goods and services, cost, and a friendly business environment.
Jawboning ad good public relations can help but open trade and real competitive advantage are the fundamental long-term factors that will build sustained confidence of global investors, including significant American industrial and portfolio investment, in India.
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