Investors watching India closely are voicing concerns over arbitrary changes in regulations which hint at growing crony capitalism, Indian lawyer Pratibha Jain has said at the World Economic Forum (WEF) in Davos.
Investors look for two main things -- clarity and certainty of laws -- as society based on the rule of law is better placed to attract foreign investments, said Jain, founding partner and head (New Delhi) of Nishith Desai Associates, at the Caspian Week at the 2019 WEF at Davos in Switzerland.
"Businesses that look for investment see a strong and independent judiciary, stable democracy with free and fair elections and the passing of power to a new government, independent central bank and other financial institutions that work based on laws created by the legislature but which stand the test of Indian constitution and judicial processes," said a statement from Nishith Desai Associates quoting Jain.
She said the fact that the Indian government is the largest litigant in the country's courts is a proof that laws framed by the legislature are constantly tested and challenged on the principles of natural justice and non-arbitrariness.
Jain cautioned however that to sustain this the independence of institutions needs to be maintained and "we must ensure that we remain strongly embedded in the principles of democracy and the rule of law".
Investors are watching India closely and already voicing concerns on arbitrary change in regulations that hint towards growing crony capitalism in the country, she added.
To counter that, a strong political and judicial will is required as investors look for two main things -- clarity and certainty of laws and its transparent and effective implementation, both of which are bedrock of a rule of law based economy, Jain added.
The statement said Jain was the only Indian lawyer to be invited to speak at this year's WEF in Davos and was of the view that India has fared well so far.
She said India's model of development has become an example of many countries to emulate but any compromise with independence of institutions and certainty of implementation of laws, rules and regulations that govern businesses can quickly turn the investor sentiment against India.
"India is a very good example of how a society based on the rule of law and liberal democracy can attract long term investment. This year India has overtaken US and China in attracting highest greenfield foreign investment," she said.
Jain further said that India's strengths are its vibrant democracy and the rule of law, demographic advantages with a large young population, a growing middle class with higher levels of education and skills and the evolution of independent and democratic institutions including and independent judiciary and free media.
"These aspects position India not only as a vibrant economic power but also a promising nation for entrepreneurship," she said.
Jain added that entrepreneurship can only happen when we provide enabling regulations for innovation and access to capital for entrepreneurs to grow their businesses.
Ensuring investors see India as a safe place to invest will require investor friendly regulations and consistency and transparency in their application, she said.
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