Prime minister Modi promises ‘unlimited’ reforms to Indian economy

Mr Modi pledged to slash red tape at a major investment summit attended by US secretary of state John Kerry, UN chief Ban Ki-moon and World Bank president Jim Yong Kim

US secretary of state John Kerry shakes hands with Indian prime minister Narendra Modi on the sidelines of the Vibrant Gujarat conference in Ahmedabad on January 11, 2015. Rick Wilking, Pool/AFP PhotoShow more

GANDHINAGAR, India // India’s prime minister Narendra Modi promised “truly unlimited” economic reforms on Sunday as he showcased his home state to global political and business leaders.

Speaking at a major investment summit attended by US secretary of state John Kerry, UN chief Ban Ki-moon and World Bank president Jim Yong Kim in the western state of Gujarat, Mr Modi pledged to slash red tape and banish India’s reputation as a hard place to do business.

Mr Modi was Gujarat’s chief minister for 13 years before leading his Bharatiya Janata Party (BJP) to national power last May, and much of his electoral appeal centred around his economic stewardship of the coastal state.

The presence of Mr Kerry and Mr Kim at the summit is seen as a vote of confidence in the prime minister’s efforts to replicate his local success and kick-start growth in Asia’s third-largest economy.

The World Bank president predicted that Mr Modi’s government was on the verge of lifting millions of Indians out of poverty, while the US state secretary said the world’s two largest democracies could make huge strides together.

Mr Modi said his right-wing BJP government had already introduced a slew of initiatives since ending a decade of rule by the left-leaning Congress.

“In a very short span of seven months, we have been able to change the atmosphere of despair and uncertainty,” he told the crowd of thousands of business leaders and foreign government ministers.

“Since day one, my government is actively working to revive the economy. My government is committed to creating a policy environment that is predictable, transparent and fair.”

But the prime minister said he was planning even greater, unspecified reforms to make it easier to do business in India and revive the flagging economy, which is struggling through the worst slowdown in decades.

“We are planning to take a quantum leap. It is not limited to one sector or region, it is truly unlimited,” he said.

“We want to do this is a cleaner and greener way.”

Under the previous Congress government, investors frequently complained about a hostile business climate in India, frustrated by bureaucracy and corruption.

In contrast, Gujarat won a reputation as India’s most investor-friendly state during the era of ‘Modi-nomics’, although critics say he tilted the playing field in favour of big business through tax breaks and subsidies.

At the summit’s opening session, Mr Kerry said the United States was looking forward to stronger trade and diplomatic ties between the world’s two largest democracies, with American companies primed for more investment.

“I can’t think of a moment in all my years in public life when our destinies are converging as significantly as they are today,” said Mr Kerry, who is due to visit a Ford auto plant in Gujarat during his trip.

“This is a relationship where we believe we can turn sustainable growth into opportunities we have not seen before,” he told the crowd.

The state secretary’s visit to India, his second in six months, comes two weeks before US president Barack Obama is due in New Delhi as Washington seeks to improve sometimes frosty ties.

It is only a year since Washington ended a de facto boycott of Mr Modi, who was blacklisted following deadly riots in Gujarat in 2002.

Mr Kim, meanwhile, hailed the Indian prime minister as a “visionary leader” and forecast India’s growth would hit 6.4 per cent this year, rising even faster next year.

“We project that India will be a bright spot in an otherwise mediocre global economic outlook,” Mr Kim said.

He added that Mr Modi’s government must press on with reforms, including by slashing bureaucratic red-tape and simplifying taxation by introducing a national goods and services tax.

As well as simplifying labour rules, Mr Modi has made manufacturing a priority of his leadership in a continuation of his time in Gujarat.

In his address to the summit, the prime minister promoted his ‘Make in India’ campaign, launched in September to fire up a manufacturing sector that is lagging behind China.

He also reiterated commitments to so-called ‘smart cities’, better infrastructure including high-speed rail networks and industrial corridors, and speedy decisions on investment and other projects.

* Agence France-Presse