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Reviving investment is key, says man tipped to be India's finance minister

(From L - R) India's main opposition Hindu-nationalist Bharatiya Janata Party (BJP) leader Lal Krishna Advani, Gujarat's chief minister and
(From L - R) India's main opposition Hindu-nationalist Bharatiya Janata Party (BJP) leader Lal Krishna Advani, Gujarat's chief minister and

By Raju Gopalakrishnan

BOHARU, India (Reuters) - Massaging his swollen feet after campaigning in the villages of Punjab, the man tipped to be India's next finance minister says he wants the government that takes office next month to approve five big-ticket investments quickly to signal it means business.

Arun Jaitley is a senior leader of the opposition Bharatiya Janata Party (BJP), hot favorite to form a government after the election that began last week and will be staggered over the next month. A former commerce minister and a skilled courtroom lawyer, he is a key lieutenant of Hindu nationalist leader Narendra Modi, the BJP's candidate for prime minister.

Jaitley has dismissed as premature talk that he will take a senior position in government, but in an interview with Reuters he gave what he said were personal views on the economy.

"You will have to re-start the investment cycle," he said, speaking after a day on the stump in the parliamentary constituency he is contesting, Amritsar, in the northern state of Punjab.

"You will have to, both in terms of policies and procedure, give an impression that it's now easy to do business in India. You make five big clearances, some big-ticket clearances."

Jaitley did not disclose what projects might be fast-tracked, but said one proposal was to involve state chief ministers in such clearances instead of leaving it to the central government.

Capital investment contributes nearly 35 percent to India's $1.8 trillion economy, but it barely grew in the fiscal year that ended in March as delays in clearances from various ministries and funding issues grounded many major projects.

Growth in Asia's third-largest economy has almost halved to below 5 percent in the past two years on weak investment and consumer demand, the worst slowdown since the 1980s.

The BJP blames the slide on poor economic management by the outgoing government led by the left-leaning Congress party.

Modi, who has presided over rapid economic growth during more than 12 years as chief minister of Gujarat state, has been wooing voters by pointing to his track record as a leader who cuts red tape and attracts investment.

"I think a political change itself will restore confidence in the first instance," said Jaitley, when asked how the economic climate could be changed.

The new government should give direction in five broad areas, he said: infrastructure, building suburban and new urban townships, massive skill development programs, promoting tourism, and lowering costs for business.

He said the government should take at least two measures that "indicate you are willing to make India a low-cost manufacturing centre".

Asked if this could include reform of India's labor laws, which investors complain discriminate against employers, he said: "A reform is the art of the possible, you don't start with something that is likely to get politically stuck."

BJP insiders are cautious about laying out specific plans because the party may need to adjust its policies after the election to win over allies and form a coalition government if it falls short of the parliamentary majority required to rule.

CITY SLICKER TO CAMPAIGN VETERAN

On the stump, Jaitley sheds his wealthy, corporate lawyer image and speaks in the rustic dialect of Punjab's heartland, attacking the Congress party as he seeks to dispel the perception that he is an outsider from New Delhi.

"They sold the waves in the air and they sold the coal under our land," he told a gathering of turban-clad Sikh farmers set in fields of ripening wheat in Boharu, a village close to the border with Pakistan. "Everywhere people are angry, they will throw this government out."

Jaitley was referring to corruption scandals in the auction of telecommunications spectrum licenses and coal mining contracts, which he said had cost the state billions of dollars.

Although locals say Jaitley has the edge in his constituency, he has a fight on his hands - his main opponent is the Congress party's Amarinder Singh, scion of a Punjabi royal family and a former chief minister of the state.

Jaitley, 61, was born and brought up in New Delhi and cut his political teeth in the fervent anti-Congress sentiment of the mid-1970s. A student-union leader of Delhi University, he was jailed by then-prime minister Indira Gandhi during a 1975-77 crackdown on political opposition.

"In one sense it troubled me because I was losing out on studies, I was a law student," he said of his 19-month incarceration. "In another sense, it hardened my political convictions, it increased my commitment, it made me rub shoulders with the top national leaders."

He met Modi briefly in the 1970s, national party politics brought them together in the 1980s, and later they bonded when Jaitley's court cases took him to Gujarat, Modi's home state.

Jaitley rejects suggestions that he is the brains behind Modi or that he is the chief strategist of the BJP campaign.

"He makes up his own mind, but he is a reasonable man," Jaitley said. "He is open to suggestions, it is reasonably possible to persuade him to a viewpoint."

Leader of the BJP in the upper house of parliament, Jaitley is not identified with the hardline Hindu side of his party.

Critics see Modi in this light, however. He has been accused of encouraging or failing to prevent anti-Muslim riots in Gujarat in 2002, though he has denied the charges and the Supreme Court has not found enough evidence to prosecute him.

Jaitley said it was the Congress party and others that were trying to "inject communal poison" into the election, and BJP manifesto pledges to the Hindu faithful were "unexceptional".

"We are contesting on the issue of governance only," he said.

(Editing by John Chalmers and Ian Geoghegan)

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