WEF, CII blame babus for poor FDI

WEF, CII blame babus for poor FDI
ENS ECONOMIC BUREAU

NEW DELHI, NOV 23: World Economic Forum and Confederation of Indian Industry have come down heavily on the babudom (Indian bureaucracy), describing it as one of the biggest impediments to foreign direct investment (FDI).

Addressing a press conference here on India Economic Summit organised by World Economic Forum (WEF) and Confederation of Indian Industry (CII), WEF’s director Colette Mathur said, “India is of great interest for investors, but the problem in India is the uncooperative attitude of facilitators. This is one of the main reasons why most of the companies find India a difficult place to invest.”

Stating that the process and spirit of reforms have not percolated down to all levels of decision-making, CII president Arun Bharat Ram said: “Rigid attitude of bureaucracy is one of the major areas of concern, which has not only dissuaded foreign companies to invest in the country but also discouraged the domestic entrepreneur to set up new projects.”

Bharat Ram said that there has been progress in various sectors. So far as the ten broad recommendations of the last India Economic Summit is concerned, decentralisation, dilution of bureaucratic control and privatisation needs more emphasis, he said.

He said, however, the government has been successful to implement some of the new economic policies, there is a need to accelerate the process.

He stressed on the need to involve foreign and Indian business investors in infrastructure development. India Economic Summit 2000 the three-day event beginning from November 26 would take stock of the policy implementation and recommend steps for creating better business environment, he said.

Emphasising the importance of India among the investors, Mathur said “despite downgrading India by several agencies, the list of participants in the WEF has increased compared to last year.” About 500 delegates from 30 countries are participating at summit. Stating that government is committed to accelerate the process of economic reforms, Mathur said: “The active involvement of NK Singh, secretary in the PMO, indicates the seriousness of government.” Singh will deliberate on the process of policy implementation, she added.

The forthcoming 3-day summit will focus on updating the investor community to present India in the international and regional context, Bharat Ram said, adding the forum would also address the challenges and opportunities emerging from the new economy sector under the umbrella theme “Leveraging Knowledge for Growth.” The Summit will be inaugurated by Prime Minister Vajpayee.

Meanwhile, as many as 67 per cent of the 1,000 CEOs covered in a survey by international consultancy firm AT Kearney have a positive view on India as a foreign direct investment destination, a mere 14 per cent are ready to make fresh investments in the country. “The Foreign Direct Investment Confidence Audit: India” report, released by AT Kearney here on Monday, revealed that 61 per cent of the companies with existing investments in India expressed confidence in the Indian market and said they would like to increase their investment.

India ranks 11 on the “Foreign Direct Investment Confidence Index”, which is five points down the previous survey. In the June 1999 survey India was pegged at the 6th position.

Speaking about the investment environment in India, AT Kearney vice president and managing director, global business policy council, Paul A Laudicina said “when it comes to FDI, India is at an important crossroads - investors are generally sanguine about the country, but reluctant to invest because of a perception that it has not done as much as it needs to reduce fundamental obstacles to investment.”

“As the Indian government commits itself to increase the inflow of FDI, our study suggests that the country is poised to realise this promise, particularly if it continues to improve the investment environment,” he said.