Credit Suisse: Investment cycle revival at least 3-4 yrs away

Investments worth a whopping Rs 10 lakh crore have been stalled in the past many years due to a complete policy inertia and lack of regulatory, primarily forest, approvals, it said.

However, since September 13, the Finance Ministry under P Chidambaram has unveiled a slew of key reform initiatives on the subsidy and foreign direct investment fronts such as hiking diesel price and capping subsidised cooking gas apart from allowing FDI in key retail trade, power, media sectors among others.

Lauding the latest proposal to set up a National Investment Board, which will act a super-structure when it comes to large investment proposals, it said if the proposal fructifies it will be one of the most effective reform measures.

Stating that the impact of the recent administrative changes, the brokerage said, "the changes are encouraging as they have put the worryingly anti-business political rhetoric firmly behind us and pulled back economy back from a precipice."

But the report says, "it can take six to eight years from reform intent to economic impact, and investment cycle is unlikely to recover at least for the next three to four years as a complete lull in the reform momentum seen in the past eight years has sapped the energy out of the economy."

Significantly, it also said the reform momentum isn't hostage to

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