Indian industry was pleased with the government pushing through key legislation on land Acquisition, lokpal & companies Act in 2013.
Besides, the government took major decisions on establishment of national investment & manufacturing zones, kickstarting of stalled projects by opening up foreign direct investment in various sectors like telecom, defense, initiating steps to boost exports & to check unwanted imports such as gold.
Also, Greater clarity on GAAR rules & issuance of safe harbor norms for transfer pricing were positive moves.
Faced with the daunting task of lowering stubbornly high inflation, the RBI too did little to lift growth keeping interest rates tight & maintaining its hawkish monetary policy stance.
Flagging demand due to inflation has hit industry hard. The administrative & bureaucratic procedures need to be time bound & fast tracked so that investments can be rapidly stimulated.
The main problem in 2013 has been the inability of the government ; in the wake of several factors such as adverse court rulings, perception of scams & lack of political consensus to take decisions which could have pulled the industry & the economy out of the slackness.
As we enter 2014, the key challenge in front of policymakers is to revive the domestic investment cycle. Though CCI has cleared several large projects, it is equally important to ensure implementation of these on the ground.
(PGDM -IV sem)