India should focus on infrastructure, easing of tax rules: Brian Moynihan, CEO, Bank of America

Mumbai: India should focus on building infrastructure and easing tax rules to help foreign investors own businesses in the country, Brian Moynihan, CEO of Bank of America, has said.
“India’s long-term prospects will depend on its workforce and structural changes in areas like developing supply chains and centres of computing capabilities which will help attract foreign direct investment,” Moynihan, the head of US’ second-largest bank, told ET in an interview. “But in the long term, it’s all about the tax, investment and infrastructure policies, and building talent. Also, easing regulations to allow foreign companies to own vital businesses and services in the country.”

Governments across the world should prioritise handling the humanitarian crisis sparked by the pandemic through stimulus for the most-affected sectors like hotel and travel. Government finances can be fixed after the crisis is over, he said.

“The stimulus has to be aimed at the industries that need help most because it is a human question now to help people get through the rest of this virus’ term,” he said. “Hotel, air travel, restaurants and, movie and theatre workers need assistance. This is not the time to focus on fiscal conservatism when you have a major healthcare and humanitarian crisis together. I don’t think there is any disagreement among anybody on that... to ensure that we get this crisis behind.’’

‘We Continue to Invest in Skills’

Moynihan joins top global executives such as JPMorgan’s Jamie Dimon and others in seeking government spending to bail out economies and for India to open up more to foreign investments with US-China trade ties fraying. India could become a destination for multinational companies if red tape is eased and the pace of permissions accelerates.

“The government should continue to provide infrastructure, networks, power and systems that are important to us (investors) because we have lots of people getting into work and lots of information to process,” said Moynihan. “Secondly, it’s the education system. We believe strongly in continuing to educate the talent you have in the country and we continue to invest in skills.”

Economies would continue to struggle till the time the impact of the crisis gets clear, but the financial systems are better positioned than the financial crisis of 2008, he said.

“This is a healthcare crisis and until this crisis becomes clear, you are going to have issues on economic activity,” Moynihan said. “But when it hit, the banking and financial systems had more capital to change operations, reduce activity and had the ability to help rather than be a strain on resources.”

He believes that there is a disconnect between the real economy and the financial markets.

“We believe that the valuations of companies will come back and adjust to the economy as it recovers. People forget that rates are low because the economy needed rates for accommodation,” the banker said.