WASHINGTON: The first year of the new BJP government is one of the best years for India in terms of liberalisation and economic reforms, a top US expert has said.
“While we cannot claim this has been a perfect year in terms of liberalising the economy, it has been one of the best years on record. Certainly well ahead of the first year of either the Vajpayee or the Singh governments,” said Rick Rossow, senior fellow and Wadhwani Chair at the Center for Strategic and International Studies – a prominent think-tank.
“Though we can say that the focus has largely been on economic decisions with a prospective effect, with less attention on issues that had previously caused investor concerns,” he said appearing before US International Trade Commission which held a hearing on trade policies in India.
Rossow argued so far he believes the Modi government has done an excellent job of quickly opening new sectors to foreign investment and making other policy changes that will positively impact foreign investors.
He said the new government has had a mixed record of “fixing” those policy issues that had been the source of tension to the American business community, and made a few key mis-steps that have been the cause of new concerns to foreign companies.
“Overall, this year has clearly been net positive.” At the end of February 2015, foreign direct investment for the most recent 12 month period is $32.5 billion. That is up 38 per cent over the previous 12 month period, he said.
At the end of February 2015, US India trade for the most recent 12 month period is $67.3 billion. That is up 5.1 per cent over the previous 12 month period, he noted.
Also at the end of April 2015, foreign institutional investment for the 12 month period is $47.2 billion. That is up 640 per cent over the previous 12 month period, he said.
Reviewing some of the biggest reforms actually carried out in the Modi government’s first 11 months in office, Rossow said while some of these focus on market access, and others broadly relax rules allowing both foreign and domestic firms to compete more effectively.
“Prime Minister Narendra Modi has set a high bar – he wants India to move on the World Bank’s ‘Doing Business’ index from number 142 to number 50,” he said.