By Priyanka Venkat
The fourth edition of the Global Business Summit kicked off on Friday was attended by some of the world’s foremost visionaries and policymakers. The theme for this edition was ‘New Economy, New Rules’, to signify larger reforms that have transformed the Indian economy, and prospective ones that are expected to usher in a new era of growth.
PM Modi warns those who try to play the system
The Prime Minister highlighted various reforms that his government had undertaken to fix the structural problems that plague the economy. In reference to the issue of non performing assets (NPAs), the Prime Minister spoke about the landmark Insolvency and Bankruptcy Code. The Insolvency and Bankruptcy Code 2016, lays down separate time-bound processes to facilitate insolvency resolution. The benefit of the code can be reflected in the form of credit flows, as money recovered from stressed assets can be invested or given as loans elsewhere.
The Goods and Services Tax (GST) also got a mention, with the minister lauding it as the biggest tax reform since independence, equipping India with a better tax compliance and revenue system. He also emphasized that the government has its focus on financial inclusion of the poor and that the 2018 budget highlights various measures like those addressing the needs of farmers such as a higher MSP and introducing a new and better healthcare system.
The recent Rs 11,300 crore scam involving Punjab National Bank also got a response in his speech, with the minister calling for better ethical practices and vigilance within financial institutions. He also warned that any such attempts to break the rules would be punished. He said, “I want to make clear that the government will take stern action against irregularities related to economic matters.” He added, “The system will not accept the theft of public money. That is the key to New Economy, New Rules.”
India’s aspiration to become a $10 trillion economy by 2030
Policy makers believe that India can become a 10 trillion dollar economy by 2030, owing to the gradual rebound of the economy from demonetisation and the accrued benefits of the various reforms by the government coming to fruition. Global entrepreneurs at the summit expressed their views on the ability of India’s economy to make quantum leaps in its growth. Bob Van Dijk, the CEO of Naspers, spoke about the e-commerce boom and pointed to the growing Internet usage amongst the populace, which demonstrates the capacity of the country in both implementing and adopting latest technologies.
He said, “In 2008, India had about 10 million Internet users, which was the same as in Holland. Then five years ago, India had roughly 30-40 million Internet users. Today, the user base is 300-400 million, and is bigger than the US.” He further added, “When very large e-commerce businesses like Flipkart come to scale, they will have a bigger role in the lives of average Indians than they would ever do in Western economies. So it is hard to overstate the size of the opportunity in e-commerce. I think it is 10x in 10 years.”
Dominic Barton, global managing partner at Mckinsey, however, expressed his concerns over the hurdles that the country might face in its ambitious endeavour. He emphasized the need for consistency in policies to allay investor’s fears of disruption in case of a government change. This is particularly important in sectors such as infrastructure where investment is highly premised on the investors having faith in the stability of regulatory policies such as that related to price. Barton said that faster expansion would require measures that aid in quicker decision making.
Donald Trump Jr. promotes his real estate business at the summit
Amongst other prominent businessmen at the summit, was none other than Donald Trump Jr. whose week-long visit to India has had the media buzzing about its implications. Outside the US, India is the second largest real estate residential market for the real estate business of the Trump Organisation. Trump Jr. is here in India to promote his real estate projects, while many ethics experts are concerned that his visit could be a conflict of interest, considering the use of the ‘Trump’ brand to promote his business while Trump senior is still in office.
At the summit, he was geared up to give a speech regarding foreign policy that was titled “Reshaping the Indo-Pacific- The New Era of Cooperation”. However, a couple of hours before the summit, this was scrapped and he instead spoke about his business, so as to not overstep ethical boundaries as a private citizen. At the summit, Trump Jr. spoke about the hurdles he had faced in his real estate business in India owing to the lack of a structured approach in the real estate sector. He said that he expects the Real Estate (Regulation and Development) Act of 2016 to tackle defaulters and accelerate growth in the sector. The Real Estate Regulation Act serves to regulate the real estate sector, by protecting buyers from errant builders. It does this by taking fraudulent builders to task and addressing problems in the sector that pertain to delays in projects, title, price and construction quality amongst other issues.
These were just some of the discussions that took place at the conference. The two-day summit intended to foster engaging discussions amongst thought leaders on the economic scenario and the potential of the country for global growth.
Featured Image Source: Pixabay
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