As the government is busy announcing and working on measures which apparently seem insignificant, instead of big bang reforms, yet investor confidence has picked up pace. My recent interactions with the business community indicate an acceptance of a new energy in the business environment. It clearly is a positive sign for the country as we are gradually putting the pieces of the growth story together. The small steps being taken to ease the environment for doing business will structurally alter the preference of foreign companies and is most likely to attract more foreign investment in the country. OECD (Organisation for Economic Co-operation and Development) expects the Indian economy to expand 6.4% next year compared with 5.9% estimated in its September '14 interim outlook.
A slew of measures were announced in the last few days that are bound to further push the growth map including diesel deregulation, allowing private participation in coal mining, liberalising the foreign direct investment regime and changes in labour laws. With the cabinet approving relaxation in Construction Foreign Direct Investment, the move will augur well for the cash-strapped real estate industry. The relaxation will not only bring in foreign capital into projects in tier II and tier III cities but also facilitate access to global capital to small projects in tier I cities.
I last talked about Modi having tasked all core sector ministries with boosting the efficiency of India's existing infrastructure by March 2015, by at least 10%. At a recent meeting called to review work in the connectivity-linked infrastructure sectors, Modi directed strict monitoring of projects, based on monthly completion of targets. This stringent review and result-oriented approach will definitely push the growth in the sector. A new civil aviation policy is under preparation of the government that will certainly push for the much-needed reforms in the sector including promotion of regional and remote area air connectivity. The highways ministry too has showcased revival of 34 projects worth more than Rs 26,000 crore in its latest presentation on infrastructure targets to the Prime Minister. Projects spanning over 4,084 km are being restructured or converted from public-private partnership to engineering, procurement and construction (EPC) mode to get them going. All these measures and proposed reforms suggest that the government is willing to walk the talk. The 'Make in India' initiative does reveal the serious intent of the government to push revival and restart the investment cycle in the country. While the intent is yet to see the appearance of high-profile investments are firms are still in a wait and watch mode, the investor community is looking at more solid reforms to surface including tackling corruption and ease the process of building infrastructure that can attract more business investment (as we discuss in this issue's cover story).
And it's not just the economic vision of the government that is grabbing eyeballs globally and bringing about a change in the society at large as well. The Swach Bharat programme aims to cover 4,041 towns by 2019 and has provided a slew of opportunities to startups working in the space of water purification, sanitation as well as solid liquid waste management. The Smart Cities initiative has also attracted global attention and all are queuing to partake in the bids to follow.
While this has initiated lots of intellectual churn, it has surely given us renewed vigour to explore our cover story which explores the outlook for 2015 for the next issue.