India’s opportunity

Devendra Fadnavis, Maharashtra Chief Minister, outlined his plans for attracting investors

The need for greater investment and continuing economic reform in India were key themes at an HSBC investor conference in Mumbai this week. Mumbai, on India’s west coast, is the capital and largest city of Maharashtra state.

Devendra Fadnavis, Maharashtra Chief Minister, reiterated plans for attracting investors to the state – including a new Mumbai airport by 2019, 100km of metro lines in the city by 2021 and a doubling of port capacity in Maharashtra in the next few years. He said that he had been told in meetings at the World Economic Forum in Davos that India had “started working as fast as China”.

What the country needs is more investment, more jobs to be created

Devendra Fadnavis

Maharashtra Chief Minister

Mr Fadnavis said that India’s young population required a constant supply of new jobs as they entered the labour market: “What the country needs is more investment, more jobs to be created.”

The growth of investment under a reform-minded government was the main discussion point at the conference, the fifth of its kind organised by HSBC to bring together policymakers, corporate leaders and investors to talk about the Indian economy.

Sunil Sanghai, HSBC’s Head of Banking for India, said: “We discussed the areas the new national government is focused on, such as public-private partnerships, land acquisition, the ‘Make in India’ initiative and the power sector.”

Pranjul Bhandari, Economist, HSBC, said that low oil prices gave India a window of opportunity to increase investment. She said that because India was a net importer of oil, current prices could potentially allow the government to reassign spending worth 0.6 per cent of gross domestic product from current spending to infrastructure development.

Ms Bhandari said that if public investment were to increase, she would expect private investment to increase as well: “Oil has had a benign and sanguine impact across the macro-economy.” She pointed out that India is expected to post its first quarterly current account surplus in 32 quarters during January-March this year.