Investors wary of corruption in India: O'Neill

NEW DELHI: Honest businessmen and investors are shying away from India because of widespread corruption and bribery, according to US treasury secretary Paul H O''Neill. He has come to India to attend the conference of finance ministers of group-20 countries.
And, India should reduce trade barriers, improve governance and economic freedom to enhance inflow of foreign direct investment and productivity, O''Neill added.
Addressing a luncheon meeting organised by CII, he said India''s english language skill and democracy should make it a preferable destination for the US investors, over China. But, US investment in India was falling from a peak of $ 737 million in 1997 to only $ 336 million in 2000. And, that in China has gone up from $ 1.25 billion in 1997 to $1.6 billion in 2000, he said.
This is mainly on account of poor governance and lack of economic freedom on foreign investment. He said respect for property rights and protection against public or private theft are needed for economic success.
To achieve faster growth, he advised India to have better business environment. He said unreasonable regulation deterred international businesses and local entrepreneurs from entering new markets and creating value. "No one wants to spend time and capital fighting a system that is unfriendly to success and fears competition."
He said to unleash the potential for higher living standards and job creation, a nation''s leaders must make an unflinching commitment to good governance and investment in people. "Without these principles in effect, capable and aspiring Indian people can''t succeed."
He added that India should lower its tariffs, averaging 32 per cent. This is more than three times higher than many other Asian economies like Indonesia, Malaysia, Philippines and Sri Lanka. While various indices of trade and investment restrictiveness rates figure India among the most restrictive countries in the world, trade relations with neighbours should be strengthened.
However, on the issue of providing protection to US steel sector, he said that US government could not remove the barriers unilaterally. Consultations among the steel producing countries are needed to chalk out a clear cut strategy. On the issue of trade in the agricultural products also, he said, a joint efforts would be required.
According to him, investment in human capital is a priority. Developed countries have shown responsibility towards deprived people, he added.