As disappointment grows over delay in ‘big-bang’ reforms, top industry leader and Managing Director of UTI Mutual Fund Leo Puri has said the government can become much bolder with the administrative and financial sector reforms to build the people’s confidence and show that changes are indeed taking place on the ground.
Stating that issues around “land, labour and resources” are very deep-rooted, Puri said any reform in these areas would certainly take time and therefore the government needs to focus on areas where reforms are much easier.
“I did not have expectations that big-bang type reforms, which some people expected, would ever be easy. A lot of people were hoping for big-bang reforms.
“To the extent you were hoping for big-bang reforms, perhaps there has been some disappointment. But that does not mean that we should not expect some very strong, purposeful, incremental reforms,” said Leo Puri, Managing Director of the country’s oldest fund house UTI Mutual Fund.
Puri, a dual Masters degree holder from Oxford and Cambridge University of the UK, said that India is a high- growth economy that has reasonable potential for 7 per cent plus growth over the next 2-3 years.
“That makes India stand out. We do still have our much talked about advantages in terms of demography, consumer demand and so on. There is still enough belief that we have a government that is broadly committed to reforms.
“That is not fundamentally altered, while there are varying degrees of expectations on the pace, speed and execution and approach. As of now, most people are still of the view that we have a government that is committed to reforms and they are backing them,” Puri told PTI in an interview here.
When asked whether the expectations were too high, Puri said it is a matter of personal opinion.
“The issues around land, labour and resources are very deep-rooted and nobody can wish them away. Also, we have a constitutional framework that encourages checks and balances, whether it is judiciary providing a check on executive or the legislature providing a check on executive,” he said.
Hopeful for reforms in all possible areas over a period of time, Puri said, “There is a policy in place for each major area of economy — whether it is land, labour, resources, development of infrastructure, reforms of financial systems.
“These are all important areas and there are still some policy gaps. I think the government is framing its views where would it like to take reforms in some of these sectors.
“I think, once these things get clearer, one should at least be able to see the progressive steps and I think that should be able to satisfy most reasonable investors.”
Puri, who has been heading UTI Mutual Fund for about two years now, was earlier Managing Director at global private equity giant Warburg Pincus. He has previously also worked as Director and Senior Advisor with McKinsey.
Puri said the government appears to be working, within the available framework, on issues like GST and land reforms, while it is also initiating the debate on financial sector.
He said: “On financial sector, my personal view is that we could be bolder. I don’t see any reason why we can’t be much more bolder in financial sector. Wherever we can be bolder, we should be bolder.
“Wherever we need to use and work within constitutional framework, the land, labour and resources, these are the areas I do not ever expect things to be easy.
“But where there is an opportunity for the executive to form a clear view, argue its case, I think people would follow and I think people will understand if there are areas where we need to take administrative reforms.”
The veteran fund manager said that the administrative reforms are very popular with “everyone except for those whom they directly apply”.
“But again, every democratic politician would surely feel confident that if he carries out a reform, there would be some constituencies which have interest would be in slowing that down. But the broader mass of electorate will welcome and applaud them and probably assure me a second term.
“Perhaps, in those kinds of areas, they can be much more bolder and financial sector is in the same category where you have a relatively small minority that might have a hesitation, misgiving or who can misunderstand the benefits. But, a vast majority of this country would welcome a swifter action in that regard,” he said.
Giving examples, Puri said that municipal and local government reforms fall in the same category.
“Citizens of any town or city of India would welcome any attempts they could see to strengthen the municipal or town planning etc. These are all areas, whether at the Centre or states level, where there are opportunities to build the people’s confidence that reforms are indeed happening on the ground,” he added.