Call for reform

Author: | Published: 1 Jul 2009

India Inc has come a long way from being a mere spectator in global M&A to a force to be reckoned with.

However, outbound activity for the first quarter of 2009 has been disappointing, falling nearly 86% to a meager $170.7 million. While some of this can be blamed on the credit crunch, there is also an urgent need for reform to make Indian outbound deals faster and easier. The government should review the existing regulatory regime and import the best practices of other countries.

Presently the Indian rupee is not fully convertible on the capital account. The government should permit full convertibility of the rupee, which would aid outbound transactions. The exchange control regulations in India also cap the amounts that can be invested by Indian companies abroad. The government should take a fresh look at the limits imposed in terms of percentages of the net worth...