PM Modi's message to India Inc, banks, auto firms: All will be well

Prime Minister Narendra Modi. File photo
We will do everything possible to make India the world's best investment destination and a better place to do business in, apart from going "as far as possible" to revive the "animal spirits" and make the "entire private sector bullish", Prime Minister Narendra Modi said in an interview with the Economic Times on Sunday .  

The prime minister's interview, which focused on key economic topics such as reviving growth, banking, ease of doing business, slowdown in demand and the US-China trade war, among other things, comes amid increasingly vocal concerns over a slowdown in the Indian economy, especially in the automobile sector, which has reported significant job losses.   

Here are the top five things the PM said in his interview:

1) All possible support for honest, law-abiding businesses

In a bid to reassure India Inc, Modi said that the government wanted entrepreneurs to enjoy higher productivity and better profits. 

The PM said that he wanted to motivate the country's industrialists to "believe in the India story" and in the "long-term potential of the Indian market". Further, he said that entrepreneurs should carry on with their businesses and complete their investment plans without any confusion. 

The PM's reassurance comes amid allegations of so-called 'tax terrorism'. After the apparent suicide of Cafe Coffee Day founder V G Siddhartha, who was under investigation by tax authorities, business leaders had expressed anger over the government going too far in its crackdown on tax evasion and fraud. 

2) Decisions taken by bankers in good faith won't face 'witch hunt'

The PM appealed to the country's bankers to pass on the benefits of low interest rates to borrowers and assured them that they would not be harassed by the authorities. 

Modi said that no growth was possible if bankers stopped taking decisions on a day-to-day basis. 

With the Reserve Bank of India slashing the benchmark repo rate for a fourth straight time last week, India Inc said that it was time banks passed on the benefits of rate cuts to end-customers, to encourage consumer spending and promote investment by companies. 

The central bank has lowered the key policy rate by a cumulative 110 basis points (bps) in the current easing cycle — bringing the rates to a nine-year low. Meanwhile, as of last week, banks had cut rates by only 29 bps. 

3) Govt committed to five-year vision of investment-led growth

PM Modi also said that his government was committed to fulfilling its five-year vision of investment-led growth, targeting Rs 100 trillion. 

Modi told the financial daily that achieving this vision would involve further liberalising India's FDI policy, the simplification of labour laws, further enhancing the ease of doing business, reforms in the power sector, asset monetisation and asset recycling in the public sector, and banking, insurance and pension sector reforms.  

4) Auto sector slowdown temporary

Modi also said that the slowdown impacting the automobile sector was temporary and that the transition to electric vehicles was not a cause for worry. 

Further, the PM said India had a large-enough market and policy space to ensure growth of both internal combustion engine-based automobile and electric vehicles. 

Last week, automakers, facing the worst slowdown in a decade, had asked for a stimulus package, including GST reduction, more liquidity and relaxation of credit facilities for retailers, in a meeting with Finance Minister Nirmala Sitharaman. The industry has warned that the slowdown could lead to immediate job losses if no steps are taken. Auto industry companies have been witnessing a steady decline in sales for more than 18 months now. 

5) 'Open minds' and 'open markets' will bring greater progress to J&K

PM Modi told the financial daily that he had taken the decision to abrogate Article 370 with regard to Jammu & Kashmir after a "great deal of thought". He added that he was certain that this would help create the three necessary conditions for investment: Stability, market access and predictable laws. 

The PM told ET that "open minds and open markets" would ensure that the youth of the region would put it on "the path of greater progress". He added that integration gives a boost to investment, innovation and incomes.

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