Interest rates hurting stock market culture in India: Experts

Feb 11 2013, 12:54 IST
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SummaryA high interest rate environment makes people relatively relaxed, complacent: Citi


"We should understand that they are not conspiring against India and if you see there is actually a good amount of goodwill out there for India. There is a lot that is going on in favour of India, but at the same time we need to understand that we need to change. We have to change quite dramatically," Kothari said.

Asked whether the delays caused by democratic processes are coming in way of India's growth on global stage, Kothari said that many countries have got democracies but they do not necessarily come in the way of conducting business.

"For example the stalemate in the US Congress is not allowed to hurt the US economy... India needs to show what are the measures that would convince the world that the problems are no longer there," he said.

Kothari said that if India manages to take its FDI inflows to the level of USD 250 billion a year, it would roughly translate into an improvement in the GDP growth rate by about 2-3 per cent.

"Therefore if we want 9-10 per cent growth rate, this USD 250 billion FDI would get us there," he said.

Asked about the steps that are required to achieve these goals, Kothari said: "It is not a continuity and consistency in the framework that would be required for these numbers, but a lot of improvement from the current policies would be needed to achieve these targets.

"We would need to experiment a lot more. The law enforcement is a major issue. Businesses need an effective law enforcement mechanism, be it for their labour dispute, patent dispute or any other issues, they want speedy resolutions.

"Especially, when it comes to international operations, no one wants to take risk and when they go for arbitration, they either go to Singapore or London. This is despite India being a nation full of lawyers and the country also doing lots of back-office legal work for the rest of the world," he said.

"It has to be a single minded pursuit to get the output, it cannot be done just by talking about streamlining the things," he said, while adding that India today competes with over a hundred countries and it has to make it attractive for the rest of the world to come here.

"Its not only about companies and investments, We would also need to make our IITs and IIMs much more attractive for students from

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