‘Investors don’t want the terms to change after they’ve invested in the country’

In Delhi to attend the 33rd India Economic Summit, SARITHA NAYYAR, chief operating officer of the World Economic Forum (WEF), tells

Subhayan Chakraborty that retrospective changes in laws and investment norms continue to bother investors. She also calls for creating agricultural clusters to facilitate more players in the food processing sector. Edited excerpts:

Have foreign investors flagged any issues about investing in India? Firstly, for the foreign direct investment, investors need to have some level of comfort that if they come into the country, the terms are not going to change afterwards. This includes rules, laws or decisions that were made in the past. Also, you don’t want to find out after making an investment, that it is not allowed. India did not see a major rise in the latest global competitiveness report by the WEF. What are the reasons for this ? India has actually performed very well in certain indicators. It has been able to maintain its position after the large jump in rankings in the previous year. Efforts by the government towards reform have been noted in areas such as ease of doing business. However, there has to be similar ease of business in terms of removing corruption. Also, tax evasion has to be reduced. The government is looking to leverage India’s strengths in the food processing sector. Since you have spent many years in the industry, what are the challenges that you see so far ? The WEF is doing a lot of work in the whole food and agriculture value chain space. As part of the ongoing summit, we have had a meeting with officials of agriculture departments of 12 state governments. Officials from the Ministry of Agriculture and the Ministry of Food Processing were present as well. We have had discussions on the ways to drive investments in agriculture, which may lead to increase in farmers incomes. How exactly can incomes be raised ? This is within the broader context of the government’s aim of doubling farmers incomes by 2022. While everybody talks about increasing agricultural productivity, it hasn’t led to a rise in farmers’ incomes. So, within that broad area, there have to be products that are moving up the value chain, that get the inputs at the right cost as well as receive access to markets. That’s where food processing comes in, as there are challenges around cold chains and logistics. So, the conversation is around what the government can do to create an enabling environment for private investments in areas such land use. And what are the steps the government needs to take, according to you ? If the private sector is going to invest, the question is whether they will get a return. But, they can’t really do it if they have very small pieces of land. Today, I understand it is around an average 17 hectares of land that any company can have, so the question is how to create agricultural clusters with multiple farmers, thereby creating larger plots of land. Then again, around creating market opportunities by leveraging technology and giving farmers the access to information related to pricing so that intermediaries can be removed. What is your opinion of the mega reforms — GST and demonetisation ? I appreciate the bold reforms taken by the government. I don’t feel that with incremental steps, we can turn the tide in such a large nation.