Chief executives and senior managers from some of the largest British companies will meet Indian Finance Minister Yashwant Sinha during his visit here on April 20.
Thirty-five chief executives from leading British corporates will meet the new finance minister for lunch. Soon afterwards, the minister will deliver a lecture to about 200 corporate and investment managers and then face questions for an hour.
The rush to meet the Indian minister speaks of a renewed interest in investment into India under the Bharatiya Janata Party (BJP)-led government, a manager with a leading British merchant bank said. We strongly believe that the Indian economy is going to accelerate from 1999 onwards, he said.
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Sinha will speak on the financial and economic policy of the new government at the meeting to be hosted by Robert Flemings Holdings and the Commercial Union Plc.
The interest in Sinhas visit among both the corporates and the institutions has been overwhelming, the senior manager with the merchant bank said. Several leading consultants and managers from law and accountancy firms will also attend the seminar that Sinha addresses.
A significant amount of foreign institutional investors (FIIs) money is flowing back into the Indian market and the mood is upbeat. Fairly heavy withdrawals had taken place towards the end of last year and early this year.
Over the last couple of weeks there has been a lot of positive sentiment towards the new government, the manager said. Most people believe that this government has a strong core that the United Front government lacked, he said. And every day the position of the new government seems to get stronger.
The signals from the new finance minister have been positive. The two that British investors have picked up are that he would encourage investment in infrastructure and later his clarification that the government will not discourage investment in other areas.
Investors worried by the word swadeshi (economic nationalism) have been reassured by remarks that it does not mean that the government will want the inadequacies of Indian industry to be covered up.
India Abroad News Service
But many questions remain among British corporate and investment managers. Many of these are expected to be thrown at Sinha during his lunch meeting and at the seminar later.
Some of the questions relate to a possible change of tax rates, subsidies, restructuring in the power sector particularly in the wake of changes in Orissa and Haryana, the question of protectionism particularly in the steel industry , labour laws, the process of approvals through the Foreign Investment Promotion Board (FIPB) and the value of the rupee whether it will be protected or allowed to float.
Privatisation of more public sector units is also on the minds of investors who see profitable possibilities for buying into these companies. Companies like the Gas Authority of India Limited (GAIL), the Indian Tourism Development Corporation (ITDC) and several others face changes in ownership that are of potential interest to foreign investors.
Investors say that the budget will be the critical pointer. It will show how far stated intention is backed by concrete action, the manager from the merchant bank said. But the stable market and the increasing liquidity has led London investors to believe that the BJP government will produce a bold budget.