Finance Minister Arun Jaitley on Monday said India needed to introspect why investors had stopped investing.
"At a time when we all have gathered here to discuss how to ensure finance for the future growth, introspection of why investors stopped investing in India can be of great help. Delay in decision making and aggressive tax regime are some of the factors, which has restricted the flow. But now, with some policy initiatives like FDI in sectors such as insurance and defense, the Central Government is trying hard to regain the confidence of the foreign investors," Jaitley said at the Invest in India Summit here.
"We are committed to ensure ease of doing business. Further, core focus on rural segment, infrastructure and smart cities is also expected to give a fillip to the investment," he added.
Earlier on Sunday, twelve memorandums of understanding (MoUs) were also signed during the summit between private companies / organizations and various departments of Government of Gujarat in the presence of Jaitley, and Gujarat Chief Minister Anandiben Patel.
In opening remarks, Saurabhbhai Patel, the Finance Minister of Government of Gujarat, said "With proactive industrial and IT policy, Gujarat has provided a conducive environment which can facilitate realization of Prime Minister's vision of 'Make in India'. Further, the state has also identified some labor intensive sectors and special incentives are being offered in order to ensure capital inflow to these sectors."
Dr. Arvind Subramanian, the Chief Economic Advisor of Ministry of Finance, said, "Unlike 1980s and 90s, voters now give decisive political mandate for decisive economic change. In such a scenario, reforms by Center combined with competitive federalism are now two potent streams for the positive change required for funding the future growth. At the same time, participation of private sector and competition between the states for fetching investment are also good sign for the growth process."
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Giving details of India's funding requirement and potential options for the same, Dr. Hasmukh Adhia, the Secretary of Department of Financial Services, Ministry of Finance, said that if we want to maintain a GDP growth rate of 7 percent per annum, financing of various sectors needs to grow at an annual rate of 18 percent.
"In other words, it requires investment flow of 800 billion US dollars i.e. Rs. 50 lakh crore per annum. To ensure this much amount of capital, we need to focus more on domestic fundings. Corporate debt market can be a good option for this purpose. Similarly, we also need to increase saving to GDP ratio," he added.