MUMBAI – Prime Minister Narendra Modi on Tuesday said a rising “New India” is one of the top investor-friendly, low risk political economies in the world and with its bold reforms the country offers “great untapped potential” for investors across the world.
“A ‘New India’ is rising. It is an India that stands on the pillars of economic opportunity for all, knowledge economy, holistic development and futuristic, resilient and digital infrastructure,” Modi told the third annual Asian Infrastructure Investment Bank (AIIB) meeting.
Modi called India one of the most investor-friendly economies with growth, macro-economic stability, political stability, large domestic market size, availability of skilled labour, good physical infrastructure and a regulatory framework that supports investment.
“On each of these parameters, India is well placed and has performed very well … From the point of a foreign investor, India counts as an extremely low risk political economy … We have simplified rules and regulations for businesses and undertaken bold reforms,” he said.
Speaking at the meeting whose theme was ‘Mobilizing Finance for Infrastructure: Innovation and Collaboration’, Modi listed several steps taken by the government to boost investments and even expressed his expectation from AIIB to play a central role in raising resources.
“Regional multi-lateralism through institutions such as AIIB can play a central role in helping to raise resources… In a short period, AIIB has approved 25 projects in a dozen countries with a total financing of over $4 billion. This is a good beginning,” Modi said.
He said there was a need for simpler processing, faster approval and affordable and sustainable interest rates on long term funds. AIIB, which started its financing operations in January 2016, has 87 members and a committed capital stock of $100 billion.
Apart from using public private partnership models, infrastructure debt funds and infrastructure investment trusts to raise funds for investment in infrastructure, the government was trying to develop brownfield assets as a separate asset class for infrastructure investment.
“Such assets, having passed the stages of land acquisition and environment and forest clearances, are relatively de-risked. Hence, for such assets, institutional investment from pension, insurance and sovereign wealth funds are likely to be more forthcoming,” said Modi.
AIIB has committed $200 million to the National Investment and Infrastructure Fund, an Indian government initiative that aims to channel investments from both domestic and international sources into infrastructure.
“India has emerged as a bright spot in the global economy which is driving global growth as well. With a size of $2.8 trillion, it is the seventh largest in the world. It is the third largest in terms of purchasing power parity,” he said.
Modi said the country’s macro-economic fundamentals were strong with stable prices, fiscal situation in control, robust external sector, $400 billion foreign exchange reserves and a steadily rising FDI flows — more than $222 billion received in the last four years.
He went to highlight how Goods and Services Tax (GST) helped India jump 42 places in three years to enter the top 100 in World Bank’s Ease of Doing Business Report 2018. India’s per capita income doubled in the last 10 years and it had a rapidly growing middle class consumers.
Other areas where India was making progress were renewable energy, e-mobility, national corridors, highways, port connectivity, dedicated freight corridors, national waterways, regional air connectivity, agriculture, sanitation, health and last mile internet connectivity, he said.
Apart from providing health coverage to 100 million poor families, Ayushman Bharat will also create large number of jobs and promote business for medicines, consumables and other medical technology equipment.
“This increased disposable income in the hands of a poor family would lead to increased demand in the economy. I see great untapped potential in this for investors,” Modi said.