Marc Faber , renowned global investor and author of The Gloom, Boom & Doom report, gave thumbs up to the Modi government and appreciated his feats, even though he opposed the cash ban.But four key issues stand out as eyesore in an otherwise impressive first three years.Slow pickup in capital spending has been a big drag on the market. Deustche Bank in a research note said despite the government’s attempts to raise public spending “within the confines of conscious fiscal discipline”, investment formation has remained anaemic.Private sector capital formation, which accounts for 75 per cent of total fixed capital formation, grew at a mere 2 per cent in FY17 over FY16.“Stubborn growth in capital formation tends to put a ceiling on GDP growth and constrain employment creation. Chief Economic Adviser Arvind Subramanian many a time slammed ratings agencies in the open and raised questions over their rating methodology, but India’s rating remains just above junk level.Fitch Ratings recently retained its BBB- rating for India, the lowest among investment grade ratings, citing weak fiscal position and a difficult business environment. The rating agency believes the business environment in India has remained relatively difficult. As per World Bank, India stood at 130th slot on ease of doing business, 155th at starting business, 185th in dealing with construction permits, 138th in registering property, 166th in enforcing contracts and 108th in trading across border.

Source: Economic Times May 16, 2017 08:50 UTC