'India needs regulatory changes to boost investor confidence'

Singapore: India, which has seen significant rise in foreign investment in recent years, needs regulatory changes to enhance investor confidence, reports PTI quoting a senior executive of a leading global bank.

India has captured its share of foreign investment significantly but the billion people-market has the potential of winning more investment in the coming years, said Ravi Manchanda, managing director at Standard Chartered Bank in Singapore, with responsibilities for development investment opportunities in the Indian market.

As such, an immediate challenge for India is to improve its standing on the 'Ease of Doing Business Index (EDBI),' which would raise investor confidence in India, Mr Manchanda told PTI.

The EDBI, a World Bank initiative which measures the efficiency with which business can be conducted in different countries, rates India at 133rd out of 183 countries studied recently. Comparatively, India's business competitor, China is rated 89th.

"With all the recent hype on India's and China's amazing race to development, there has not been enough talk on the structural and regulatory changes that need to be made in the two economies," he pointed out with a special emphasis on India, which faces of challenge of maintaining high economic growth rates.

"India is constantly competing with China to become the largest emerging market in the world," Mr Manchanda said. But for India to match China, Mr Manchanda believed India has to make major improvements in measures, such as enforcing contracts period to be reduced to 406 days from 1,420 days, reducing the number of procedures to 34 from 46 and cutting costs to 11% from 39.6% as of now. This would lift India's rating on EDBI at 113, and put it closer to China.

Mr Manchanda said that FDI is critical for India's annual double-digit economic growth, and says international investment is being competed for by emerging economies like Brazil and Russia as well as economies that are being re-built including Argentina.

"India has become an acknowledged emerging market but we can expect more options for investors from newly emerging markets, offering incentive-based opportunities," he said.

The EDBI is a good guide and India could draw more investments from abroad with benefits far outweighing the cost of minimum action required to remedy this, he said.

Foreign direct investment (FDI) into India has been increasing steadily with 2006-2007 seeing the highest growth of over 150%. India has received FDI with a cumulative worth of approximately $137 billion over the last 10 years.

China, he said, received the same amount of FDI in the last two years.


Govt sets up commission in a bid to check illegal mining

New Delhi: The government today cleared a proposal for setting up a commission in an effort to check illegal mining and it has been asked to submit its report within 18 months, reports PTI.

The decision follows several meetings that the Prime Minister's Office (PMO) has held with senior mines ministry officials to ensure that illegal mining is checked across the country.

The commission has been asked to submit its report within 18 months after monitoring the progress of state-governments like Karnataka in checking the menace, the sources said.

"The Union Cabinet today approved proposal for setting up a commission to check illegal mining in the country. The commission will focus on alleged illegal mining in Karnataka and other mineral producing states," said a source.

Of late, the issue of illegal mining has been in the limelight, especially in the mineral rich states like Karnataka, Orissa and Jharkhand.

The concerns over the issue has gained further ground after the Reddy brothers, Karunakar and Janardhan Reddy, ministers in the Karnataka government have been allegedly found to be involved in illegal mining.

Union mines minister BK Handique has written to Karnataka chief minister BS Yeddyurappa four times since November 2009, extending help of central agencies like the Central Bureau of Investigation (CBI) to curb illegal mining.

The central government is preparing a new Mines Act, which has a separate section that seeks to put an end to illegal mining.


Pranab hopeful of further decline in inflation

New Delhi: Finance minister Pranab Mukherjee expressed confidence that inflation would come down further even as the rate of price rise after a gap of five months came down to single-digits at 9.97% in July, reports PTI.

"Of course, it will moderate," he told reporters, when asked about the possibility of inflation sliding further in coming months.

"Policy rates had some impact (on sliding inflation) but there are also base factors," Mr Mukherjee said expressing satisfaction over declining inflation.

The minister attributed the slide in inflation of food items to seasonal factors "particularly in respect of some food items like fruits, vegetables and milk".

After remaining in double-digits since February, the wholesale price-based inflation fell to single-digits at 9.97% in July, owing to decline in prices of certain food and non-food items.

Inflation was at 10.55% in June, while for May it was revised upwards to 11.14% from the provisional number of 10.16%. Inflation entered the double digits in February when it climbed to 10.06%, as per the final figures.

Inflation has become a political sensitive issue with the opposition raising the issue within and outside Parliament. Led by the National Democratic Alliance (NDA), the opposition parties organised an all India strike on 5th July to protest against rising inflation and the hike in prices of petroleum products.


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