India must take forward reforms: PwC

Davos: Stressing on its belief in the growth of emerging markets, leading global consultancy giant PwC has said India should move forward with its reform agenda to continue to benefit from this growth story.

Speaking to PTI on the sidelines of the World Economic Forum Annual Meeting here, PricewaterhouseCoopers India Chairman Deepak Kapoor said the emerging market growth story remains strong and if India misses the bus, it would be of its own doing.

Asked about his views on the two major issues of the recent past, the Vodafone tax dispute and the flip-flop on retail FDI by the government, Kapoor said, "These are two different issues, one relates to a big transaction and the other is about the political opposition to a proposed policy decision. But indeed the image of brand India in the global landscape was hit in both the cases."

"While the court decision in the Vodafone case has managed to undo the damage to Indian`s image among global investors, there is also hope in the other matter, the retail FDI, as the government has said that it would work on building a consensus for opening up the sector for foreign investors," he added.

"What we need to worry about is the possibility of India being left out of the emerging growth story," Kapoor said.

The emerging markets have indeed arrived and their growth is certain on the global landscape, but we need to make sure that India does not miss the bus in this emerging market growth story because of such issues that hurt the country`s image in the global economic context," he added. .

"The growth rate differential is compelling between the developed markets and the developing economies. One set of the economies are growing at 2-3 per cent, while the other is delivering growth of 7-8 or even 9-10 per cent," Kapoor noted.

"There is no question of emerging market growth and everyone is now acknowledging that their time has come. If India misses the bus just because of its own doing, it would be a matter of concern," he said.

Asked about the perceived notion of a policy paralysis in the country, he said: "The reforms may not be happening because of the compulsions of coalition politics, but there are ways to manage the things."

"The government has previously also managed to take major policy decisions in a similar political scenario, such as the nuclear deal. What we should understand is that if India does not move in the right direction, its share would go to other emerging markets," he said.

Kapoor said there should be debates on what steps need to be taken, what policies need to be framed and then these debates must be taken to the right conclusion.

Asked about the talks that the government might introduce some taxation regulation to tackle cases similar to Vodafone dispute, Kapoor said that the government was entirely entitled to take any policy decision, but any decision has to be taken with a prospective effect and a policy should not made "just to reverse something."