The upcoming Union Budget is an opportunity for the NDA government to show a roadmap to reach the $5 trillion economy-target, and prove that it is not just rhetoric, said a senior executive at UK India Business Council (UKIBC).
"It will be important for any external investor to follow the Budget for any changes in the context of policy, and how the narrative aligns with the policy. It’s a question of how you get from A to B. What I would like to see in the Budget is a narrative which explains or articulates that," Richard Heald, Group CEO, UKIBC, told Moneycontrol.
The $5 trillion target for the Indian economy by 2024 was one of the highlights of the 2019 Budget. And since then, Prime Minister Narendra Modi has used several platforms to reiterate the target.
However, the recent estimate of GDP growing by 5 percent in the 2020 financial year - the lowest in 11 years - and the current slowdown in the economy, have raised questions on achieving the $5 trillion target.
The Budget, which will be presented by Finance Minister Nirmala Sitharaman on February 1, thus could become a catalytic moment, said Heald.
Despite the current slowdown, added the former Vice Chairman of Rothschild for South and South-East Asia, India continues to be on the radar for investors.
"India is an exciting place in its self with a hugely developing economy," said Heald, adding that an investor doesn't necessarily need to choose between the country and China. You invest in India for a set of reasons different from why you would invest in China," added the industry veteran.
Founded in 2007, the UKIBC promotes trade and business relations between the United Kingdom and India.
Heald, who has been visiting India for over 20 years, also reiterated that the ongoing protests over the Citizen Amendment Act will not hamper India as a destination for foreign investors.
" I see it as a domestic issue, one which really doesn’t impact on investment decisions of UK businesses. If you take any commercial decision as to whether you are going to invest in a country or not, I would argue that this isn’t necessarily a factor at all," he said.Brexit an opportunity
While agreeing that there will be a short-term impact of Brexit on the UK economy, Heald pointed out that the new environment will also be an opportunity for Indian businesses.
"UK businesses will have to be smarter and those who are not yet exporting need to think about new markets and adaptations to increase their profitability and earnings. That’s why I think Brexit is quite fundamental in terms of the future," said Heald.
The UK will formally leave the European Union on January 31, which will be followed by a transition period of 11 months.
As UK businesses prepare for a post-Brexit environment, India presents them with a promising opportunity, says Heald. He explains:
"We have similar legal system, accounting and language. There is a huge scope for UK businesses to have a socio-economic impact in India...UK businesses have expertise in areas like waste management, water purification, renewable energy and agri-tech, which are eminently translatable into an Indian context."