India needs more foreign investment



Two decades ago as India's minister of finance, Manmohan Singh pushed through reforms to end the "licence raj", a nightmare web of central planning permits and regulation that had sealed India's economy off from global trade and investment.

The reforms, most of them enacted while PV Narasimha Rao was prime minister, jump-started an Indian economic boom that helped hundreds of millions rise from poverty.

Today Mr Singh is prime minister himself, and he presides over a country that needs a new wave of reforms if its economy is ever going to lift the hundreds of millions of Indians still mired in poverty. A Supreme Court ruling on Friday points the way.

The world hears often and at length about India's corruption in high and low places and also about its appallingly pre-modern infrastructure. Indeed, both of these are all-too-effective brakes on development.

A third problem, less reported but no less serious, is the pervasive wariness, even hostility, about outside private investment. Twenty years after the licence raj, foreign investors are too often perceived as menacing, rather than essential partners in the growth India needs.

On Friday, the Supreme Court ruled in favour of Vodafone, the British telecom company, in a capital gains tax matter springing from its 2007 acquisition of an Indian mobile-phone firm. The ruling will spare Vodafone some $2.6 billion (Dh9.55bn) in taxes.

This is a legal ruling on a specific case. But over the years of legal combat, the Vodafone matter has acquired great symbolic significance, and has been watched attentively wherever investors aspire to do business with India. UAE-based Etisalat, which entered the Indian market in 2008 and is involved in its own legal battle, is among those paying attention.

The ruling may, as we hope, serve as a clarion call to Indian lawmakers and bureaucrats, helping them to understand that an unpredictable, avaricious bureaucratic climate is a damaging deterrent to investment. Tax policy, labour law, regulatory delays and other aspects of the country's business climate all need attention. So, as always, do the wider problems of infrastructure and corruption.

To be sure, India's complex, tumultuous politics can slow progress to a crawl. The government has recently had to abandon much, though not all, of a plan to allow foreign retailers into the country, for example.

But if Mr Singh and his allies can rediscover the spirit that led to the reforms of the early '90s, all Indians will stand to benefit.

What is Genes in Space?

Genes in Space is an annual competition first launched by the UAE Space Agency, The National and Boeing in 2015.

It challenges school pupils to design experiments to be conducted in space and it aims to encourage future talent for the UAE’s fledgling space industry. It is the first of its kind in the UAE and, as well as encouraging talent, it also aims to raise interest and awareness among the general population about space exploration. 

Know before you go
  • Jebel Akhdar is a two-hour drive from Muscat airport or a six-hour drive from Dubai. It’s impossible to visit by car unless you have a 4x4. Phone ahead to the hotel to arrange a transfer.
  • If you’re driving, make sure your insurance covers Oman.
  • By air: Budget airlines Air Arabia, Flydubai and SalamAir offer direct routes to Muscat from the UAE.
  • Tourists from the Emirates (UAE nationals not included) must apply for an Omani visa online before arrival at evisa.rop.gov.om. The process typically takes several days.
  • Flash floods are probable due to the terrain and a lack of drainage. Always check the weather before venturing into any canyons or other remote areas and identify a plan of escape that includes high ground, shelter and parking where your car won’t be overtaken by sudden downpours.

 

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