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India one of the most open economies today, says Modi

Monday, October 17, 2016

Brazilian President Michel Temer, Russian President Vladimir Putin, Prime Minister Narendra Modi, Chinese President Xi Jinping and South African President Jacob Zuma at the BRICS Summit press statement in Benaulim, Goa yesterday.

Asserting that results of the reforms undertaken by his government were visible, Prime Minister Narendra Modi yesterday said the country has transformed into "one of the most open economies" in the world with a strong growth rate. "We have undertaken substantial reforms in the past two years to streamline and simplify governance, especially in doing business. The results are clearly visible," Modi told the Brics Business Council as part of the eighth summit of the five-nation grouping in Goa.

"We have moved up in almost all global indices that measure such performances. We have transformed India into one of the most open economies in the world today. Growth is strong and we are taking steps to keep the momentum going," the Prime Minister said. The Modi government has undertaken a slew of reforms like passing the indirect taxation legislation on goods and services tax which seeks to make the country a single market, passing the Bankruptcy Code which will help troubled/failed companies find an exit, and through flagship programmes on the administrative front like the 'Make in India' and the 'Digital India' initiatives.

All this has had India's ranking in ease of doing business go up by multiple notches in a year to 39 as per the latest ranking by the World Bank. The government has also been consistently raising caps on foreign holding in domestic companies in a slew of sensitive sectors like defence insurance and defence. According to Finance Ministry, as many as 90% of the key economic sectors where FDI is allowed are on the automatic route, which help foreign companies save lots of time to start their operations.

Even though the June quarter growth slowed to 7.1% from 7.6% in the previous quarter, Asia's third largest economy continues to be the fastest growing one in the world and policymakers are expecting the GDP expansion for the current fiscal year to come in at 7.6% and accelerate further in coming years to 8% going forward. Modi said there were a slew of "matching priorities" between the business council and that of his administration, including dismantling trade barriers, promoting skills development, establishing manufacturing supply chains and infrastructure development. Infrastructure has been a key focus of the government and investment of an estimated USD 1 trillion has been made to build roads/highways, airports and seaports over the next decade. Modi also acknowledged the progress achieved by the Brics Business Council over the last three years, since the idea was first mooted at the Durban summit.

He said the Council represents the economic strength and the diversity of the five-nation grouping of the world's fastest emerging economies. Modi also underlined the need for promoting economic and commercial ties and described this as a "foundational impulse" of the idea of Brics, and added that partnerships create wealth and value in societies.

The Prime Minister also applauded the work done by New Development Bank over the last year and asked the lender to work closely with the Brics Business Council for identifying and implementing large infra projects which can help transform the economies and the lives of the poor. The Shanghai-headquartered NDB has a book of USD 911 million and plans to close 2016 with a book of USD 1 billion, which will be raised up to USD 2.5 billion by end of 2017.

Five players representing BRICS nations ink pact to mine Gold
Five players from BRICS nations yesterday inked agreement to develop the Kluchevskoye gold deposits located in the Chita region of Russia at pre-production investment of USD 400-500 million. The five players are SUN Gold Ltd, China National Gold Group Corp (China National Gold or CG), the Russian Sovereign Investment Fund, Far East and Baikal Region Development Fund (FEDF), and partners from Brazil and South Africa, SUN Gold said in a statement.

BRICS agree to set up credit rating agency
Five-nation group BRICS yesterday agreed to set up an independent rating agency based on market-oriented principles saying it would further strengthen global governance architecture. "We welcome experts exploring the possibility of setting up an independent BRICS Rating Agency based on market-oriented principles, in order to further strengthen the global governance architecture," stated the joint declaration issued after the 8th BRICS Summit.

"We believe that BRICS institution-building is critical to our shared vision of transforming the global financial architecture to one based on the principles of fairness and equity," the declaration stated further. "In order to further bridge the gap in the global financial architecture, we agreed to fast track the setting up of a BRICS Rating Agency," Prime Minister Narendra Modi said in a statement at the conclusion of the BRICS Summit. The BRICS countries have already set up New Development Bank, which became operational last year, to meet funding requirements of the members.

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