A day after global rating agency Standard and Poor’s said there would be no revision in India’s ratings for two years, Economic Affairs Secretary Shaktikanta Das said it was just a “matter of view”.
Speaking to reporters after a three-hour long meeting with Foreign Portfolio Investors (FPIs) here on Tuesday, Das expressed confidence that the economy would grow at over 7.5 per cent this fiscal.
“The Indian economy is doing well. We are among the best performing markets among emerging economies, and developed economies...We expect growth to be above 7.5 per cent this fiscal,” Das said. The estimate is higher than the Reserve Bank of India’s revised forecast of 7.4 per cent, but is lower than the Budget estimate of 8-8.5 per cent GDP growth this fiscal.
Das said the government would continue with the reforms process and pointed out that the Indian markets have been giving good returns.
“With regard to confidence in India, I think the growth numbers are before you... also look at the returns which Indian market is offering to all investors, including FPIs. We are one of the best performing markets among our comparables,” he said.
Commenting on the meeting, Das said a number of issues were discussed with the foreign investors, including operational problems faced by them such as registration and several taxation concerns of foreign institutional investors. Measures to develop the corporate bond market and enhance liquidity were also discussed at the meeting, which was attended, among others, by officials from the Reserve Bank of India (RBI) and the Central Board of Direct Taxes.
“We also discussed fund management industry in India,” Das said.
The government would try to address some of the concerns raised by foreign investors over the next few months while the remaining would be taken up in the Union Budget 2016-17.
Ease of doing business “Since we are four months away from the Budget, some of the suggestions have been found to be very useful in the run-up to the Budget,” said Das, underlining that the meeting was a part of Prime Minister Narendra Modi’s and the government’s special focus on the ease of doing business.
Over two dozen FPIs, including representatives from Citibank, Deutsche Bank, Fidelity, Goldman Sachs and BlackRock, attended the meeting where the Finance Minister prodded them to set up permanent establishment in the country while promising to enhance ease of doing business. Nomura Fixed Income Securities MD Neeraj Gambhir said the issue of withholding tax of 5 per cent on corporate bonds was discussed at the meeting. “The industry has been asking for a longer term treatment on it. It is five per cent, it’s due to expire in 2017,” he said.
“The government has taken several steps for deepening of bond market and some suggestions were made to further enhance liquidity in the sector,” said Kakhu Nakhate, President and Country Head India, Bank of America Merrill Lynch.