“Encourage more and more foreign participation to fund India’s capital requirements,” Dinesh Kumar Khara, Chairman, SBI at CII Partnership Summit 2020

New Delhi: It is important for India to encourage more and more foreign participation in order to meet the country’s capital requirements, said the Chairman of the State Bank of India, Shri Dinesh Kumar Khara.

“Going forward, the kind of requirement that the economy has in terms of about Rs 100 crores plus of infrastructure flowing through will be possible only if we encourage more and more foreign participation,” Shri Dinesh Khara said while addressing the CII Partnership Summit 2020.

A strong proponent of getting foreign money to spur India’s growth, Shri Khara said that even if the Development Finance Institution (DFI) is actioned, the source of funds will have to be international as compared to the earlier version of DFI, wherein the funds were essentially coming from the Government.

Shri Khara believed that considering the prevailing scenario in the domestic market where household savings are the major source of capital in the economy, the growth trajectory that the country is aiming at might be difficult to achieve.

Mr Sanjay Nayar, CEO, KKR India, was of the belief that foreign money shall come and go, but the long lasting and effective way to fund the country’s growth is to go local and develop the local capital markets. “We need to do a lot for the local corporate debt market. On the broad level, you need to encourage local savings”, said Mr Nayar.

Mr Nayar was also of the opinion that a bad bank is a good idea for a country like India and that it was the best way forward in order to get some Government funding or DFI funding.

“In a country India, the way to try and position the country for foreign capital is simply to show competitiveness,” said Mr Lambah, Joint Head, Investment Group, Direct Investments, Telecom, Media & Technology, Temasek.

Mr Vishal Kampani, Managing Director, J M Financial Limited, opined that for India to reach its target of the $5 trillion economy, it was important to have a lot more banks. “If we have to reach $5 trillion mark, we need 10-15 well capitalised banks, which are able to move the financial savings towards interesting instruments and products which can fund our long-term growth needs.” He also mentioned that credit had to grow at a much faster pace for GDP to increase.

Mr Rajeev Kannan, Managing Executive Officer, Deputy Head, Asia Pacific Division, Sumitomo Mitsui Banking Corporation, Singapore, mentioned that infrastructure financing area is one area where the country could look at investing for a better growth prospect, going forward.

Dr Janmejaya Sinha, Chairman, CII National Committee on Inclusion and Digitization, and Chairman – India, The Boston Consulting Group India Private Limited, emphasized that there are project finance economies and there are working capital economies, and all developed economies are working capital economies. Countries like India are mostly project financed economies and thus it is important for economies like ours to take project risks.

“There are project finance economies and there are working capital economies, I consider all developed economies as working capital economies,” said Mr Sinha. “Then there are countries like India which are project financed economies. We should run fiscal risks, we should direct these fiscal risks towards infrastructure of all kinds, not just hard infrastructure, health infrastructure, nutrition and environment so that we lift the productivity of the environment,” he added.