India will kick-start a major drive to attract global investors from Thursday, followed by Prime Minister Narendra Modi’s one-to-one interaction with corporate heads over the next two weeks, according to economic affairs secretary Tarun Bajaj.
The senior bureaucrat held out hope for the coronavirus disease (Covid-19)-battered economy, which he said was recovering fast and an imminent third stimulus would further accelerate its growth.
The PM will preside over the Virtual Global Investor Roundtable-20 (VGIR-20) on Thursday (November 5). It would focus on discussions around India’s economic and investment outlook, structural reforms and the government’s vision for the path to a $5 trillion economy, Bajaj said.
The roundtable would be attended by the world’s 20 largest pension and sovereign wealth funds, who have around $6 trillion assets under their management, he said.
These global institutional investors represent key regions including the United States of America (USA), Europe, Canada, Korea, Japan, the Middle East, Australia, and Singapore, he added.
Bajaj said some of them are looking at India as an investment destination for the first time. Some of the prominent funds that would be participating in the event are Australian Super, British Columbia Investment Management Corporation, Future Fund, GIC, Japan Post Bank, Japan Bank for International Cooperation, Korean Investment Corporation, Mubadala, Nippon Life, Pension Denmark, Qatar Investment Authority and US International Development Finance Corporation.
“We also have major Indian industrialists, six of them who will also participate in this conference to share their experience… They are Mr Deepak Parekh, Mr Dilip Sanghvi, Mr Mukesh Ambani, Mr Nandan Nilekani, Mr Ratan Tata and Mr Uday Kotak,” he said.
The PM would hold a one-to-one virtual interaction with each investor over the next two weeks, he added.
Bajaj said the Indian economy was showing strong signs of recovery as this was the opportune moment for the government to engage with global investors, who are looking for an alternative market to China.
In September, Purchasing Managers’ Index (PMI) for manufacturing was highest in a decade at 56.8.
The PMI, which had plunged below 40 in the first four months of the current financial year, was at 49.8 in September, and close to the benchmark of 50.
An index of over 50 in PMI indicates expansion.
Bajaj said the PMI services data in October, which is expected soon, might also indicate an expansion. He said several other indicators such as a 10% growth in the Goods and Services Tax (GST) collections in October indicate that the economy was fast emerging out of the adverse impact due to the prevailing Covid-19 pandemic.
India, which is Asia’s third-largest economy after China and Japan, had seen a record 23.9% contraction in the first quarter of the current financial year because of the Covid-19 outbreak and the ensuing 68-day nationwide lockdown restrictions since March 25.
The lockdown had stopped production activities at most factories, closed business establishments, triggered a massive exodus of migrant workers from cities back to their native places in rural India and confined the public indoors in urban and semi-urban spaces.
Bajaj said the government started consultations with stakeholders before announcing a third stimulus to provide additional impetus to the economy soon. “We are discussing those lines. It is difficult for me to commit a date. But we have received a lot of requests and comments from various sectors and we are looking into them,” he said.
Finance minister Nirmala Sitharaman would unveil a third stimulus soon, he added.
Sitharaman had said on October 19 that the government, which has started a mid-year review of the economy, is open to offering another stimulus package. She had announced two packages to revive the economy from the adverse impact of the Covid-19 pandemic.
Between March 26 and May 17, the Modi-led National Democratic Alliance (NDA) government unveiled Rs.20.97 trillion of stimulus-cum-relief measures.
A demand stimulus package consisting of Rs 730,000 million in public expenditure was announced on October 12.
Divakar Vijayasarathy, founder and managing partner at consulting firm DVS Advisors LLP, said, “Global corporate heads meeting the highest level of policymakers will facilitate hearing directly from the horses’ mouth. In times of uncertainty such as the Covid-19 pandemic, such a clear policy communication is essential.”
He said: “The timing also coincided well with the recent announcement of GST collections crossing Rs. 1 trillion after nearly eight months, manufacturing PMI rebounding and with the announcement that the government is considering one more stimulus package. This will definitely generate interest among the investors. Besides, the government in its recent budget also has given 100% exemptions of passive income of the sovereign wealth funds from investments in infrastructure and specified sectors.
If this meeting translates into investments, it will augur well for the infrastructure sector in specific and the economy as a whole.”
Vijayasarathy added: “Better times appear to be round the corner because of the resumption of economic activities and Covid-19 vaccine trials moving into a third phase.”
