The City of London Corporation and the High Commission of India hosted a panel discussion with members of the City of London Advisory Council for India on Thursday, 2nd June at the Old Library, Guildhall. The members included Rajiv Luthra (of Luthra and Luthra Law Offices), Stuart Milne (HSBC), Zia Mody (AZB & Partners), Nasser Munjee (Development Credit Bank), Ravi Narain (NSE, India), and Deepak Parekh (HDFC Group). The panel discussion was moderated by Mark Boleat, the Policy Chairman of the City of London Corporation, which is the leading centre for policy issues affecting London as a key international financial centre.
The opening remarks were made by Dr. Virander Paul, the Deputy High Commissioner of India, in which he highlighted the strengths and challenges of the Indian economy amidst the current global economic slowdown. Prime Minister Modi, since the start of the year, has stressed the message of ‘reform to transform India’. Finance Minister Arun Jaitley reiterated this message in April during discussions with the IMF where he emerged developed economies like to look at their own economic stability to ensure the global financial system can withstand any future issues. This session represented an opportunity to hear first-hand from the Indian High Commission and financial sector experts on the Modi Government’s reform agenda.
The key issues discussed were the growth of the Indian renewable energy sector, the emergent Indian start-up ecosystem, the debate around the projected growth of the service sector, financial inclusion, FDI in Defence, and the rising digitisation, among others. Nasser Munjee emphasised on the slow growth of the manufacturing sector and how the projected growth rate of India fails to reflect this. Supply of long term financing for infrastructure has historically come from commercial banks but banks are increasingly becoming constrained in their lending to the sector as they are approaching their internal and prudential exposure limits. A proposal for furthering robust infrastructure in India should, as suggested, include institutional reforms, land and labour reforms, allowing insurance and pension 50% investments, debt markets (allowing foreign investors to invest in local currency), setting up of independent regulators, and simplifying documentation and allowing modifications.
Rajiv Luthra raised an urgent concern over the growth of the renewable energy sector in India. He suggested that the government policies that support household consumption of renewable energy are poorly advertised despite having enormous potential. The panel agreed that although there exists a well laid-out plan for a financial and social growth by the Modi government, the execution is skewed and needs a thorough and comprehensive review.
