The countdown to the Budget has begun and with it the list of demands and expectations from the finance minister. Speaking to CNBC-TV18 on the sidelines of the IVCA Conclave, various private equity and venture capital funds drew focus to macros that need to be addressed to encourage money sitting on the sidelines to participate in the "Make in India" initiative.
Sanjay Nayar, CEO, KKR said: “This Budget is crucial for addressing supply side issues, there is a need to create an enabling environment. The government also needs to clarify where the allocation for such an exercise will come from - private or public. Government needs to give some direction. If Indian companies start investing, foreign companies will follow suit.”
Also crucial, is a greater thrust on an enabling environment - by boosting power, road, transport and logistics infra. Investors, here, warn that the love-hate relationship between the government and private capital, in infrastructure, needs reconciliation.
Niten Malhan, MD, Warburg Pincus believes the experience of private capital in infra has been poor. Risk and rewards need to be shared between the government and private capital in a balanced manner. Currently, private players are expected to take the risk, while government is unable to do its part, he added.
Meanwhile, investors have cautioned that the urge to not cross the red line of fiscal discipline should not be at the expense of public spends but rather, pruning of subsidies
Rahul Bhasin, Managing Partner, Baring Private Equity said subsidies should be better targeted. “Though politically unpalatable, steps such as the Food Security Act should be done away with. It is gross inefficient and has leakages. The government needs to be more realistic,” he added.
Meanwhile, investors have welcomed the government's decision on Vodafone's transfer pricing dispute. However, they see this as a low-hanging fruit, with more efforts required to assuage hurt sentiments owing to combative taxman.
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