India must carry 'difficult' economic reforms: Obama

[1983-2011]

Noting that India prohibited foreign investment in too many sectors such as retail, US President Barack Obama today cited concerns over deteriorating investment climate there to endorse another "wave" of economic reforms.

Noting that India prohibited foreign investment in too many sectors such as retail, US President Barack Obama today cited concerns over deteriorating investment climate there to endorse another "wave" of economic reforms. Still sounding positive about Indian economy, "which continues to grow at an impressive rate," he said that to some extent, India's slower growth is a reflection of the larger slow down in the global economy. The US President answered a wide range of questions on the state of the Indian as well as global economy, Indo-Pak ties and American strategy in the Asia-Pacific region during an interview to PTI here. Obama was careful not to be directly critical of the negative investment climate in India but cited the concerns of the American business community to make his points. Many in the American business community, "one of the great champions of the US-India partnership", have expressed concerns that the investment climate in India is deteriorating, he said. "They tell us it is still too hard to invest in India. In too many sectors, such as retail, India limits or prohibits the foreign investment that is necessary to create jobs in both our countries, and which is necessary for India to continue to grow," Obama said. Refraining from prescribing any solutions for India's economic difficulties, the President said, "it is not the place of the United States to tell other nations, including India, how to chart its economic future. That is for Indians to decide." Obama noted that "there appears to be a growing consensus in India that the time may be right for another wave of economic reforms to make India more competitive in the global economy." Obama then went on to add, "and as India makes the difficult reforms that are necessary, it will continue to have a partner in the United States." "It is important, though, to put this in the context of India's incredible growth and development in recent decades," he said. The President pointed out that India had lifted tens of millions of people out of poverty to create one of the world's largest middle classes. "Indian innovation is an engine of the global economy. And even with the recent challenges, the Indian economy continues to grow at an impressive rate. The Indian people have displayed a remarkable capacity to meet India's challenges," he said. Describing Prime Minister Manmohan Singh as "my friend and partner with whom I have worked closely", Obama said he valued the insights of the Indian leader at various international fora including the recent G20 meeting in Mexico. He said at the G20 they agreed that one of the best things they could do to get the global economy growing faster was to renew the focus on growth and job creation in their own countries. "That's my priority in the US. Of course, one of the most effective ways we can create jobs is to continue expanding trade and investment, including between the US and India." The President said they need to keep strengthening the pillars of the long-term economic vitality and competitiveness, including the education of the people of the two countries, science and technology, and the modern infrastructure that allows them to move goods and services faster. "We need to keep up the fight against corruption, which stifles innovation and is one of the biggest barriers to job creation and economic growth around the world. These are some of the things we can do together as global partners," he said. Obama said one of the reasons why he valued the G20 was that it was the only place where leaders of the world's largest economies -- developed and developing -- can come together and address the economic challenges that affected everyone. Right now, he said, the global economy continued to face a number of challenges. Global growth, including growth in emerging economies like India, has slowed. The situation in Europe has, of course, been a concern, Obama said. The G20 summit in Mexico was therefore an opportunity for them to hear directly from European leaders on the progress they were making and on their next steps. The President said, "In our global economy, we can't just have a few leaders of the most advanced economies making decisions that touch the lives of billions of people around the world. "That's why we made the G20 the leading forum for global economic decision-making, to give developing and emerging nations, like India, a larger voice. It's why we increased the role of India and other emerging economies in international financial institutions. These institutions are stronger because of India's active participation." Obama said he believed that the European leaders grasp the seriousness of the situation and were committed to holding the Eurozone together with the steps they have taken in the recent weeks. "All of us have a profound interest in Europe's success and the US will continue to support our European friends as they work through this challenge."

http://www.moneycontrol.com/news/economy/india-must-carry-difficult-economic-reforms-obama_730625.html

[1983-2011]

Obama misinformed, certain lobbies spreading stories: Govt

Responding to US President Barack Obama raising concerns over "deteriorating" investment climate in India, government on Sunday said certain "international lobbies" were spreading such stories and he was not properly informed about the country's strong economic fundamentals. "Certain international lobbies like Vodafone are spreading this kind of a story and Obama was not properly informed about the things that are happening, particularly when India's economic fundamentals are strong," corporate affairs minister Veerappa Moily told reporters in Bangalore when asked about Obama's remarks in an interview to PTI. Opposition parties lashed out at Obama for his remarks that India prohibits foreign investment in too many sectors, with BJP saying the country cannot open its markets just because he wants it. "If Obama wants FDI in retail and India does not want, then it won't come just because he is demanding it," was the terse reaction of BJP leader Yashwant Sinha said in Delhi. Moily said the perception of deteriorating investment climate in India was not based on economic parameters, but on certain impression of few individuals, entrepreneurs and investors. "That is also being removed. Once that perception is removed, I think in 2-3 months, we are back again with a kickstart to pick up the same speed as we had done in the last decade," he said. Moily said there was no crisis in India, whereas the US and other countries were facing crisis, "not once but twice in 2008 and 2010". "Not even a single financial institution has collapsed in this country, whereas many such things have collapsed in US and other countries," he said. He said in the last one decade, India has registered a vibrant growth rate of 8 to 9.5%, "but perhaps for the economic crisis in the US and Europe, the country would have definitely crossed 10 per cent of the GDP." "That is the potential of India which can recover back immediately by taking some remedial steps," Moily said. He said 55% of the investment in the form of FIIs and FDIs comes from as many as ten countries like Mauritius, Cyprus and Singapore, and only 19% comes from the US and other countries. "Ultimately Prime Minister Manmohan Singh is going to address all these problems and it is being considered. That's why again the investment climate is picking up," he said. BJP Vice-President Mukhtar Abbas Naqvi termed the US President's remarks as "laughable". "That country is giving us a certificate on investment and economy when it itself is facing economic problems. We have to ensure our national interests on our own. It is laughable," he said. The CPI-M reacted to Obama's remarks in a similar fashion. "They want to open up our economy and market on their terms. For this purpose they are creating this pressure," said party leader Nilotpal Basu. The BJP and the Left have opposed FDI, especially in retail citing interests of the small trader. The Samajwadi Party, which is extending outside support to UPA, said India will not take a decision in support of the United States. "They only want their market to expand in our country," SP leader Shahid Siddique said. Noting that India prohibited foreign investment in too many sectors such as retail, Obama on Sunday cited concerns over deteriorating investment climate here to endorse another "wave" of economic reforms.

http://www.hindustantimes.com/business-news/WorldEconomy/Obama-misinformed-certain-lobbies-spreading-stories-Govt/Article1-889583.aspx

[1983-2011]

[jusarrived]

This is exactly what i have been saying . Hopefully the govt won succumb to both external and internal pressure . we are self reliant to a large extent cos of measured reforms , why change now ? opening important sectors like retail blindly will hurt us in a long run .

[velu]

Reforms are possible only when the ruling party has absolute majority in india. Now when congress needs to bring any reforms they have to dilly dally all its partners and opposition too. :( I think in india its mandatory for the opposition parties to oppose anything that ruling party chages in both central as well in state level. :facepalm:

[beetle]

Reforms are possible only when the ruling party has absolute majority in india. Now when congress needs to bring any reforms they have to dilly dally all its partners and opposition too. :( I think in india its mandatory for the opposition parties to oppose anything that ruling party chages in both central as well in state level. :facepalm:

UPA ko to allies ne maara hai.They are on a suicide mission with a mamata bomb on their back...opposition to apni he ladai lad raha hai......

[Crookbond]

This is exactly what i have been saying . Hopefully the govt won succumb to both external and internal pressure . we are self reliant to a large extent cos of measured reforms , why change now ? opening important sectors like retail blindly will hurt us in a long run .

Lets not go down that route

[Clarke]

Lets not go down that route

Not blindly, but when a country throws away a third of its fresh produce and thousands of tons of grain and while farmers commit suicide every hr, its bonkers to not allow some level of investment and thus introduce a much higher level of logistics. I don't see another direct measure that could lower food inflation in the medium term. Besides, how can we talk about the long term with such urgent issues around ?

[The Outsider]

Not blindly' date='[b'] but when a country throws away a third of its fresh produce and thousands of tons of grain and while farmers commit suicide every hr, its bonkers to not allow some level of investment and thus introduce a much higher level of logistics. I don't see another direct measure that could lower food inflation in the medium term. Besides, how can we talk about the long term with such urgent issues around ?

That's a very valid point. And I am far from the one's who suggest that we should just open up the economy for everyone in all sectors. In fact, I might be one of the few people left who actually supported Nehru's model because it led to the country develop it's own industrial and agricultural strength. Liberalization was perhaps left 10 years too late, but a liberal economy from the start would have left India with a very weak foundation. But at this point the government institutions have failed to adequately manage our food produce. The government's solution to the problem is increasing the cost of food grain by Re. 1. That shows ineptness at best and intellectual bankruptcy at worse. I am sure with the amount being siphoned off in the supply chain dealings, if tenders were given to private companies to distribute the food for profit, the country would still come out better. As you said it's one thing for people to starve and suffer when there is no food, but tomfoolery of epic proportions for it to happen when the resources are there but they can't be distributed.

[Crookbond]

Not blindly, but when a country throws away a third of its fresh produce and thousands of tons of grain and while farmers commit suicide every hr, its bonkers to not allow some level of investment and thus introduce a much higher level of logistics. I don't see another direct measure that could lower food inflation in the medium term. Besides, how can we talk about the long term with such urgent issues around ?

I know those facts Clarke and hence, I told him not to "suggest" that. Another fact, FDI in retail will only make people access to more fresher and better fruit.

[Crookbond]

That's a very valid point. And I am far from the one's who suggest that we should just open up the economy for everyone in all sectors. In fact, I might be one of the few people left who actually supported Nehru's model because it led to the country develop it's own industrial and agricultural strength. Liberalization was perhaps left 10 years too late, but a liberal economy from the start would have left India with a very weak foundation. But at this point the government institutions have failed to adequately manage our food produce. The government's solution to the problem is increasing the cost of food grain by Re. 1. That shows ineptness at best and intellectual bankruptcy at worse. I am sure with the amount being siphoned off in the supply chain dealings, if tenders were given to private companies to distribute the food for profit, the country would still come out better. As you said it's one thing for people to starve and suffer when there is no food, but tomfoolery of epic proportions for it to happen when the resources are there but they can't be distributed.

Exactly. I just don't get this middle man holding things up attitude. If the middle men want to be in business change their strategies, innovate rather than holding the government ransom.

[veer]

Not blindly' date= but when a country throws away a third of its fresh produce and thousands of tons of grain and while farmers commit suicide every hr, its bonkers to not allow some level of investment and thus introduce a much higher level of logistics. I don't see another direct measure that could lower food inflation in the medium term. Besides, how can we talk about the long term with such urgent issues around ?

Is this for real? I can believe if that's happening in US but in India? :((

[Crookbond]

Yes, also you don't get to have fresh fruit because there's no sophisticated transport mechanism prevalent.

[Trichromatic]

Is this for real? I can believe if that's happening in US but in India? :((

I doubt that official figures anywhere close to that, but food grain wastage is certainly very high.

[jusarrived]

Some of you are not getting it. There is no one stopping from investing in India , but the demand is for controlling stakes which makes all the difference .

[Clarke]

Is this for real? I can believe if that's happening in US but in India? :((

I doubt that official figures anywhere close to that' date=' but food grain wastage is certainly very high.[/quote'] That's what generally has been reported. The numbers for fresh produce are obviously higher than grains. http://web.mit.edu/newsoffice/2012/sustainable-approaches-to-reducing-food-waste-in-india.html http://www.bbc.co.uk/news/world-asia-india-18482389 http://online.wsj.com/article/SB10001424052702304259304576372813010336844.html

[Clarke]

Some of you are not getting it. There is no one stopping from investing in India ' date= but the demand is for controlling stakes which makes all the difference .

Mamta didi and others, wrt retail ?

[Crookbond]

Clarke, Not just them but there's definitely some other scam related issue as well. The DMK's etc. want to make money out of it.

[Clarke]

^ Ofcourse, although the issue i started with in this thread seems to be very fundamental and impacts the poor/middle class more than anything else. If that can't be pursued diligently & resolved, what exactly are the priorities of the govt & the opposition ?

[Crookbond]

^ Ofcourse' date=' although the issue i started with in this thread seems to be very fundamental and impacts the poor/middle class more than anything else. If that can't be pursued diligently & resolved, what exactly are the priorities of the govt & the opposition ?[/quote'] Clarke - You think they are the priority? Once again I see this 'scam thing' ( you can call it a conspiracy theory) but after so many scams I see something going on behind the scenes. Also, what the F are the middle men (business men) crying for? They say - It puts them out of business. I ask them - Why? They say - They will provide it at cheaper rates. I say - Toh bencho, Why don't you change your business strategy? They - Poker face.