Page 4 - IACC Newsletter October November 2013 Issue 13

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President’s Message
Dear Members,
Election blues are fast enveloping the Indian political scene. In less than five months’ time, India will have a new
government under a new prime minister. As political pundits are viewing with rapt attention the developments that are
going to unfold, there is a marked transformation in the political game. A few years back, the corporate world used to be
abuzz with speculation as to what would be the policy changes when a new government takes office. Admittedly there is
not much of a speculation doing the round now. Does it mean that the new dispensation at the centre will not indulge in
any policy reversal? To a great extent, corporate world seems to be relieved of such apprehensions since they can see a
linear policy in operation irrespective of the hues and colours of the new government in office. It is a great achievement
and does amplify that India is inching towards a dispensation where the economics is getting gradually detached from
politics.
Yet a stable government at the centre is critical to pursue our development goals. Stability, as we have experienced in the
earlier regimes, need not have to come from a single party rule. A rainbow coalition government can be as decisive as a
single party rule. Many point out that there are advantages to a coalition government since there will be checks and
balances that will end up pursuing balanced policies, which will not swing to the extremes. Indian polity is decisive and
matured and they know what is best for them. Let us pin hopes on their judgment.
In the meanwhile, there are many policy decisions in the anvil that can create significant impact on the Indo-US economic
relations. A case in point is the circulation of the recent policy paper on allowing FDI in the e-commerce for discussion
prior to taking a final call on that. The current policy in India does not allow FDI in the business of selling via online to
consumers, while business to business is allowed. The former has the potential to attract considerable investments from
the US. Many US based e-commerce entities like Amazon and eBay have been lobbying with the government for opening
up the e-commerce sector for FDI. Let us hope that a balanced policy will be taken soon. Coupled with this is the decision
of the cabinet committee on investment to clear investments worth Rs 4 lakh crores, which were held up due to
bureaucratic red tapism.
Yet, the incoming government at the centre will have many complex problems to be addressed to. First and foremost is
the price rise, because of that the interest rates are still kept high making cost of investment prohibitively high. The new
dispensation has to address the jobless growth that we have experienced for the last few years. Jobs in the manufacturing
sector have not kept pace with our requirement with the result that the backlog of unemployed is increasing day by day.
Job creation depends on newer investments in all sectors like infrastructure, services sector and agri-related avenues like
food processing.
The Indo-US economic partnership and building on the existing good works done by both countries will naturally an
important plank of the new dispensation. There are many bilateral issues that need focused attention. For instance, a
bilateral investment treaty between India and the US is still a pipe dream so as also India’s long pending demand for