- Modi told business leaders to `contribute to nation-building'
- Industry group calls for benchmark rate to fall by 125 bps
Prime Minister Narendra Modi urged India’s business leaders to invest for the good of the nation after seeking fresh ideas from billionaires, bankers and bureaucrats as the country’s stocks and currency slide.
“He suggested to industry that they should really contribute to nation-building to invest in India,” Deputy Finance Minister Jayant Sinha told reporters on Tuesday, referring to Modi. The prime minister called on everyone to work together and focus on job creation to get India through a turbulent period in the global economy, Sinha said.
Modi has struggled to pass key economic proposals including a goods-and-services tax even as China’s slowdown threatens to drag down global growth. India’s stocks and currency have been among the worst hit in Asia since China devalued the yuan last month.
India’s benchmark stock index rose 1.7 percent on Tuesday, the biggest gain in two weeks, and the rupee strengthened 0.4 percent to 66.55 a dollar.
The meeting at Modi’s official residence included billionaires Mukesh Ambani and Gautam Adani, and top bankers Arundhati Bhattacharya and Chanda Kochhar, Economic Times reported, without citing anyone. Central bank Governor Raghuram Rajan also attended.
‘Boldness Is Required’
Some 27 people spoke at the three-hour meeting, Finance Minister Arun Jaitley told reporters afterward. Many spoke about the need for lower borrowing costs, he said.
“The major thrust of the entire discussion really was that since in terms of the economy India is relatively untouched, little touched by these events except the tangent impact on the market, it’s an opportunity that India must avail of,” Jaitley said.
Modi asked companies to boost their risk-taking ability, Sumit Mazumder, president of the Confederation of Indian Industry, said after the meeting.
“The Prime Minister said boldness is required,” said Rana Kapoor, managing director of Yes Bank Ltd. and president of the Associated Chambers of Commerce & Industry of India. “Most business leaders made a gentle point that there is an improving case for overall review of interest rates.”
Kapoor’s group submitted 12 recommendations to spur the economy, including slashing the benchmark policy rate by as much as 1.25 percentage points by March, according to a statement. It also called for speeding up project permissions and reviewing trade agreements with other countries to avoid dumping of commodities such as steel, especially from China.
India’s growth slowed to 7 percent in April-June, putting it on par with China as the world’s fastest-growing major economy. India had briefly taken over the top spot in the previous quarter.