Hinduja Group calls for immediate steps to kick-start growth

LONDON: The London-based Hinduja Group today called for immediate steps to kick-start growth of the Indian economy, including assuring global investors against any retrospective application of laws.

Gopichand and Srichand Hinduja, co-chairmen of the Hinduja Group, said in a statement issued here that steps like clearing large investment projects were also needed to boost growth.

"The state of the economy in any country depends on fundamentals, management and perceptions. The fundamentals of the India economy remain strong, the management could perhaps have been better and perceptions have become very negative, more than is warranted," the statement said.

"Once a negative sentiment grows, it is very difficult to reverse it as negativity feeds upon itself," it warned.

The group expressed its eagerness to play a "constructive role" in the Indian economy's revival.

Referring to Finance Minister P Chidambaram's efforts to assuage investors following the fall in the value of the rupee, the group said his remarks were "reassuring".

"The statement by the Indian Finance Minister P Chidambaram on Thursday was timely and welcome. It was clearly reassuring because it provided facts, whereas earlier, speculation, especially in the currency market, was occurring without knowledge of the realities," the statement said.

"Unsurprisingly, the statement led to a recovery in the Indian stock exchanges and to an appreciation in the value of the rupee," it said.

The London-based entrepreneurs highlighted the need to re-visit India's monetary policy as "signs of recovery in the US and the Eurozone, along with signals that the US may be reversing its quantitative easing, has added to India's woes".

In reference to overseas Indian citizens, the group said the government could consider a "voluntary disclosure scheme" so that there could be an incentive for "money held abroad to return". Non-Resident Indians could be mobilised to invest through imaginative ways, the statement said.

"The shareholding of NRIs/OCIs in Indian companies should be treated on a par with Indian shareholders," it said.