"India will give better returns than many other countries," finance minister Arun Jaitley said while addressing investors and business leaders in Hong Kong. He said the government was giving special focus on improving the ease of doing business in the country with initiatives like 'Make In India' designed to boost the manufacturing sector that has huge potential.
He said foreign investments could give great additional resources and that the country's infrastructure sector needs huge investments. "Railways, highways and power sectors are among those that require funds and the success of projects in these areas would largely depend on bankability," Jaitley said.
Jaitley was in Honh Kong for two days seeking to attract foreign investors, including large asset managers, to the Indian markets. "Special focus is being given on improving ease of doing business. Investors have felt in the past that the procedures have been difficult in India," he said. Digital India and Make in India (initiatives) are designed to give special boost to manufacturing and India has huge potential in these areas, he added.
According to him, some states were not charging adequate tariff for electricity as a result of which the health of power distribution companies was being affected. "These states cannot expect the PSU banks to fund the deficit of discoms," Jaitley stressed.
Jaitley said that a key priority of the government was to strengthen the PSU banks. "Some weaker banks could be merged with stronger banks as just diluting stake would not resolve the problem of NPAs (non performing assets)," he added.
Acknowledging that stalled projects have impacted the balance sheets of private sector companies, Jaitley said the proposed national investment and infrastructure fund would be a "great enabler" to attract investment as well as help repair the balance sheets of affected firms.
The fund would operate independent of the government just as another investor, he added. Noting that international investors are showing great interest in railways-related areas, Jaitley said the government has kick started many stalled projects in the highways sector. He also said that pension funds can play a major role in the highways space.
In response to queries about opportunities in the manufacturing and construction businesses, the finance minister said he would be happy to encourage investment in the manufacturing sector. According to Jaitley, setting up of 100 smart cities would give a boost to urbanisation. Besides, he expressed hope that many states would amend their land acquisition laws.
