Jaitley sings the right tune at Citi investor summit

Minister says government will take small steps in reforms to ensure growth

Salil Panchal
Published: Nov 18, 2014 05:12:34 PM IST
Updated: Nov 18, 2014 05:40:22 PM IST

Life is not a template and neither is mine. Like several who have worked as journalists, I am a generalist in my over two decade experience across print, global news wires and dotcom firms. But there has been one underlying theme in each phase; life gave me the chance to observe and tell a story -- from early days tracking a securities scam to terror attacks and some of India's most significant court trials. Besides writing, I have jumped fences to become an entrepreneur, as an investment advisor -- and also taught the finer aspects of business journalism to young minds. At Forbes India, I also keep an eye on some of its proprietary specials like the Rich list, GenNext and Celebrity lists. An alumnus of Xavier Institute of Communications and H.R College of Commerce and Economics in Mumbai, I have worked for organisations such as Agence France-Presse, Business Standard, The Financial Express and The Times of India prior to this.

Jaitley sings the right tune at Citi investor summit
Image: Getty Images
Arun Jaitley, Finance minister

Indian investors seem to be buoyed by the latest statements of Finance Minister Arun Jaitley over structural reforms and the plan ahead which would help revive economic growth. The benchmark 30-share Sensex index hit a record high of 28,282.85 points in morning trade on Tuesday, a day after Jaitley stressed that the government would take several small steps in reforms, rather than announcing ‘big bang reforms’. The finance minister was speaking at a Citi investor summit.

The government, which took charge in May, announced a slew of reforms, including foreign direct investment in defence, diesel deregulation, revised pricing for domestically produced natural gas, changes in labour laws and to allow opening up of commercial mining in coal by private firms.

Jaitley also urged that the cost of capital would need to be lowered, which would give a “good fillip” to the economy. “I am quite clear in my mind that the cost of capital has to come down. Inflation has moderated, global fuel price has eased. Therefore, if RBI, which is a highly professional organisation, in its wisdom decides to bring down the cost of capital, (it) will give a good fillip to the Indian economy,” Jaitley told the gathering of investors.

Citi analysts Aditya Narain and Jitender Tokas, said: “We were impressed. We believe the market should be too.”

The analysts said there was enough in the pipeline, which should come out in the open soon. This includes a revised Goods & Services Tax act, land acquisition law modifications and ongoing labour law changes.

The government has announced FDI in insurance, but it awaits clearance from an expert panel, which is to be reconstituted. The government is also working to create a single window clearance system to boost steel, coal and power projects.

In an unrelated move, Prime Ministers Narendra Modi and his Australian counterpart Tony Abbott signed a new framework of security cooperation between the two countries, with talks to boost maritime security and counter terrorism.

Citi, in its report released on Monday, however, said there are several reforms it hoped for, like reducing the cost of capital and boosting domestic bank financing, which the central bank would need to look at. “A lot needs to be done; it’s not all in their hands.”

“The finance minister spent about twice the time he had committed to: Addressing a range of questions clearly, suggesting an increasingly cohesive and action-oriented economic direction. We were decidedly impressed and so were most investors, we believe,” the Citi report said.

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  • Rakesh

    All the hoopla over reforms is fine which obviously supports only the business class people as always been by the saffron party, but Mr. Finance Minister please do something this time for the employed and retired class people both private and government like increasing the income tax slab etc. Increasing it by 10k or 20k is not enough in this economy!

    on Nov 21, 2014