Modi pitches India as 'the' investment destination, says tax cut just beginning of long innings
New York: Fresh from slashing the tax rate for companies to lowest in almost three decades, Prime Minister Narendra Modi on Wednesday pitched India as 'the' investment destination for global investors, saying reforms by his government are just the beginning of a long innings.
Modi promised to personally act as a bridge for businesses and said India has a government which respects corporates and wealth creators.
"India's growth story has four important factors that are rare to find anywhere else in the world. These factors are democracy, demography, demand, and decisiveness," he said. "Democracy together with political stability, predictable policy and independent judiciary gives confidence of safety and security of investment and of growth."
Speaking at the Bloomberg Global Business Forum here, he said last week's decision to slash corporate tax rate is a "big revolutionary step" for investment and the move has been hailed by businesses as historic.
The government last week announced a surprise reduction in the corporate tax rate from close to 35 per cent to 25.17 per cent, a move that is being dubbed as a massive trigger for revving up growth and, more importantly, resurrecting sentiments that were down in the dumps.
The immediate benefit is increased cash flows to corporate India that will be channelised into debt reduction or incremental investments in increasing capacity.
"If you want to invest in a market where there is scale, come to India," Modi said. "If you want to invest in a market where the latest trends and features are appreciated, come to India. If you want to invest in start-ups with a huge market, come to India. If you want to invest in one of the world's largest infrastructure ecosystem, come to India."
Asia's third largest economy is rapidly modernising its cities, and equipping them with the latest technology and citizen-friendly infrastructure, the Prime Minister said.
"Thus if you want to invest in urbanisation, come to India," he said. "We have opened our defence sector like never before. If you want to Make in India, for India and for the world, come to India."
India, he said, is waiting for global investors. "India is your only destination. I am waiting to welcome you."
"Your desires and our dreams match perfectly. Your technology and our talent can change the world. Your scale and our skills can speed up global economic growth," he said. "Your prudent method and our pragmatic mind can write new stories in management. Your rational ways and our human values can show the path which the world is looking for."
"And if there is any gap anywhere, I will personally act as a bridge," he said.
Modi said democracy and an English-based judicial system gives added confidence to investors as there would be no problem of interpretation.
The government is looking at investing Rs 100 lakh crore in building new airports, railway lines, electrification, laying new roads and giving houses to all. "Infrastructure is a priority," Modi emphasised.
"We have taken numerous decisions to increase investors confidence including scraping of 50 old laws which were coming in way of development," he said. "This is just the beginning. We have a long innings ahead. The world business has a golden opportunity to partner with India in this journey."
Modi said his government does not shy away from taking the biggest of steps to improve the business environment. "Today India has a government that respects businesses and wealth creators."
"In new India, we have run a campaign of de-regulation, de-licensing and de-bottlenecking. These reforms have helped India improve performance in every global ranking," he said, citing a jump of 10 ranks on Logistics Performance Index, 13 places rise on Global Competitiveness Index, 24 places climb on the Global Innovation Index and 65 places jump on the World Bank's Ease of Doing Business Index.
India, he said, is investing Rs 100 lakh crore or USD 1.3 trillion in developing modern infrastructure.
Stating that the target of nearly doubling the economy to USD 5 trillion by 2024 was achievable, he said about USD 1 trillion was added to the size of the economy during last five years.
India has a young and energetic talent pool with the world's largest engineering education base and solid R&D facilities, he said, adding the large population in India is becoming economically empowered with rising purchasing power and thereby creating demand.
Almost every citizen in India has a unique ID, mobile phone and bank account which is being used for targeted delivery of services, plugging leakages and bringing in transparency, he said.
In the last five years, India has got USD 286 billion of foreign direct investment, which is half of what the country received in the previous 20 years. "Half of American FDI has come in last four years," he added.
As many as 90 per cent of investment has come in sectors where foreign investment is under automatic route and 40 per cent has come as greenfield investment. "This means that today investor confidence in India has increased," he said.
"India is No.1 on seven out of 10 investments indicators including political stability, currency stability, high-quality products, anti-corruption, low cost of production, strategic location and respect for IPR," he said.