Reform or perish: Jaitley's message to states

Says investors are not enthused when there is policy paralysis

Union Finance Minister Arun Jaitley on Monday said states that did not reform would be left behind in attracting investment, since the future was for competitive federalism. State governments would have to create an enabling policy environment.

In addition to cooperative federalism, India has also become a place of competitive federalism. Compete with each other to attract investment, he said at the inauguration of Happening Haryana, a Global Investors Summit in Gurgaon, on Monday.

“Reform or perish could not be more true than today. Investors are not philanthropists and for every rupee they invest, they look for returns. If there is policy paralysis, investors are not enthused,” Jaitley said.

Stability and predictability in policy was important, he said, while adding that not only the attitude of the government but also of major political formations was important. “If decision making is slow, investment will suffer,” he said.

The minister said Haryana had the geographical advantage of being part of the National Capital Region. It had a composite economy, with a large agricultural presence. At the same time, it had transformed into a manufacturing hub over 30-40 years. Besides, the state was growing into a successful service centre.

With only 1.34 per cent of India’s geographical area and 2.09 per cent of population, Haryana contributes 3.51 per cent to India’s gross domestic product and 4.2 per cent to its exports.

Jaitley cautioned that inequality was one reason for emergence of social challenges.

“Therefore, development has to be addressed in other parts of states. The network of institutions that is emerging has to be in these areas. Connectivity with road and rail is important.” He said also announcements in the recently presented Budget could help in uniform development.

Nine Union ministers attended the first day of the two-day summit; four were present in the inaugural session. The session also saw a line-up of 20 industry titans, including Adi Godrej, chairman, Godrej Group; Sunil Bharti Mittal, chairman, Bharti Group; Gautam Adani, chairman, Adani Group and Y C Deveshwar, chairman, ITC. N R Narayana Murthy, chairman-emeritus, Infosys; Indra Nooyi, chairman, PepsiCo and Anand Mahindra, chairman, Mahindra Group, connected through video streaming.

In his address, Chief Minister Manohar Lal said the state’s Enterprises Promotion Policy, 2015, was just a beginning and some major economic policy reforms have been planned in the coming days. “When the Summit was conceived five months ago, it was designed as the first event towards realising the goal of achieving an investment of Rs 1 lakh crore or $16 billion set when the policy was announced on August 11, 2015. But now, we have already exceeded this target by 200 per cent,” he said.