Infrastructure shortfall, red tape impeding growth

Written by Neha Pal | Neha Pal | Updated: Dec 13 2010, 05:39am hrs
Dilip Modi, MD of Spice Televentures has taken over as the new president of industry chamber Assocham. In an interview with FEs Neha Pal, Modi shares views on the role the government and private sector should play in promoting investments and stresses on the need to have a simple, transparent and predictable regulatory framework.

Excerpts:

As Assocham president what kind of balance would you want to see between the government and private sector

The role of the government must be restricted to ensuring equity objectives while achieving efficiency must be left to the private sector. The government must concentrate on providing conducive environment for the private sector to operate and to use public resources for attracting private resources into less attractive sectors. Independent regulatory bodies should also be set up.

What kind of issues are hampering the corporate growth

The bureaucratic approvals, infrastructure shortfalls and land acquisition problems are the top three constraints on corporate investments. The other important constraints are demand conditions, environment clearances, availability of labour with suitable skills, cost of credit and labour cost.

What do you think about the present growth scenario

The economy has expanded by close to 9% in the first half of 2010-11. Assocham is optimistic that the overall growth rate for the year 2010-11 will touch or surpass 9% mark. While the third quarter results would not be much different from those of first two quarters, Q4 results would be much better and help push the average from the present levels.

What measures should be taken by the government to promote investments in the country

Assocham observed that a simple, transparent and predictable regulatory framework is the necessary condition for investment promotion. The other measures of investment promotion are tax concessions, credit policy, simplifying land acquisition policies, increase foreign direct investment limit, better regulation of imports and liberal exit policy.