Prime Minister Manmohan Singh knows that India's flagging economy badly needs foreign capital. And he's desperately trying to do something about it.
This week, he appointed an influential former International Monetary Fund economist to head India's central bank. Last week he rolled back regulations and stumped for new economic reforms. "Once again, we will prove the naysayers and Cassandras of doom wrong," he vowed.
Meanwhile, the stock market has been tumbling.
Everybody loves an optimist. But a more jaded speechwriter might have replaced the prime minister's ancient Greek reference with a phrase adapted from contemporary Detroit: Would the last one out of India please turn out the lights?
Over the past year and a half, formerly bullish investors have been climbing over each other to get out of India, leaving billions of dollars on the floor. Worse, despite repeated moves to make the country look more attractive, the great pullout shows little sign of slowing.
It turns out that new decrees and fine sounding speeches don't make up for years spent attempting to machete-hack through India's extra-strength red tape.
"They promise the moon, but they can't deliver," said Rajinder Singh, whose firm, LexJurists, is working to extricate several US investors from stymied hotel and resort projects in the state of Rajasthan.
Apart from what the central government offers, the states promise single-window clearances for investments; help with acquiring land at below market prices; and an easy path through reams of rules and regulations.
But once the money is committed, something as simple as getting a liquor license can take years. And if there's an election and a new government comes to power, you just might have to start over, one lawyer explained.
In the latest move to staunch the bleeding, last week India eased rules on foreign direct investment (FDI) by multi-brand retail chains like Walmart, and boosted limits or streamlined procedures for investing in other potentially attractive areas, such as the booming telecommunications sector.
For retailers, it scrapped requirements that they only operate in cities with more than a million people, and that compelled them to source 30 percent of their products from local small and medium-sized companies - anathema to the Walmart business model.
