Home arrow Archives arrow Open Forum arrow Open Forum-2015 arrow Attracting Foreign Investment: CONFIDENCE BUILDING STEPS VITAL, By Dhurjati Mukherjee, 14 Oct, 2015
 
Home
News and Features
INFA Digest
Parliament Spotlight
Dossiers
Publications
Journalism Awards
Archives
RSS
 
 
 
 
 
 
Attracting Foreign Investment: CONFIDENCE BUILDING STEPS VITAL, By Dhurjati Mukherjee, 14 Oct, 2015 Print E-mail

\Open Forum

New Delhi, 14 October 2015

Attracting Foreign Investment

CONFIDENCE BUILDING STEPS VITAL

By Dhurjati Mukherjee

 

India has emerged as the top global investment destination of the world, overtaking China and US, according to the data base of Financial Express. The country attracted roughly $3 billion more than China and $4 billion than the US. It is heartening to note that investors have taken special interest in the Indian growth story in spite of not so favourable international climate.           

 

This has been further emboldened by the recent visit of Prime Minister Modi to Silicon Valley with software and technology czars. As he aptly pointed out at California: “Today India has a new identity, a new image the world over. The biggest reason for this transformation lies in your fingers that compelled the world to shed the old notions it had about India”. The message sent by Modi has impressed overseas investors and in spite of the fact that the country lacks majorly in physical infrastructure development, several multilateral agencies are now of the opinion that India is one of the top emerging economies.

            . 

Recently the RBI Governor stated that the 0.50 per cent point reduction in repo rate was part of the process of getting investments. However, he cautioned against one instrument for tackling all problems of the economy.

 

Understanding the hallmark of Modi’s politics, going back to his years as the Gujarat chief minister, it has been an amalgam of modernity -- represented by technology, infrastructure and economic growth – with a certain brand of Hindutva, underpinned on the RSS’s version of nationalism. If the latter is kept under check and does not disturb the economic growth process, the best results can be expected. But this is easier said than done as is clearly manifest from the sporadic incidents relating to consumption of beef and conversions.

 

The initiatives taken by the government like ‘Make in India’, ‘Digital India’ have sent the right signal to foreign investors. But though there is aggressive marketing led by no less than the Prime Minister himself, the need for major reforms in the home front is acutely felt. The areas where investors are eagerly awaiting reforms include tax policy, labour laws and last but not the least cutting red tape. Added to this is the need to curb political interference in the functioning of units which has been a major problem in some States.

  

There is a feeling that Modi’s leadership is changing India but to make this a reality lot of changes are called for. Apart from reforms, there is need for giving the much-needed stress on infrastructure development and ensuring that roads and power projects in particular are allowed to come up, specially in the deficient States.

 

Way back in 2009 Goldman Sachs had estimated that India will need to invest US$1.7 trillion on infrastructure projects before 2020 to meet its economic needs, a part of which would be in upgrading India's road network. It may be mentioned here that the Government is attempting to promote foreign investment in road projects. Foreign participation in Indian road network construction has attracted 45 international contractors and 40 design/engineering consultants, with Malaysia, South Korea, United Kingdom and United States being the largest players.

 

With better highways and power and telecommunication facilities would manufacturing with foreign participation be developed in the country in a big way? Service sector has been growing quite rapidly and if western technology comes to the country in the form of tie-ups, the sector would expand in a big way and generate more employment. 

             

A new cadre of change agents has to be nurtured at different levels, right from the bureaucracy at the top to right down at the panchayat level. The massive Skills India programme is another project to make available trained personnel having practical skills which is very much needed for the development of industrial units.

  

Making the programmes taken by the Government a reality is, no doubt, a challenging task for which a new genre of bureaucrats and political leaders would be necessary. They would have to be sincere and ensure that the targets are achieved and there is no corruption in executing them. But it has to be admitted that lack of professionalism is a big impediment in achieving the targets and also reaching out to the desired stakeholders.

 

Though the country’s high population growth and undeveloped regions have to be tackled effectively with resources being a constraint, the present Government has a big challenge which is easier said than accomplished. One may mention here a recently released report of the World Bank which found that in 2012, 50 per cent of the world’s poor lived in this country. However, in spite of all this, the Government has to combine the social principles of economic life with hard-pressed reforms to make India a cherished destination for foreign investors.  

 

While Japan has already informed its intention to invest in a big way in various projects, specially relating to infrastructure development -- and in particular the Delhi-Mumbai industrial corridor -- some of the assurances of China should also materialize in the coming years. It needs to be mentioned that both these countries are very much interested to give their expertise in high-speed railway network and also partly fund these. Apart from these countries, the investors from the European Union and the US have also to be attracted in a big way towards the much-needed projects. Recently Prime Minister signed 18 pacts with Germany in critical sectors such as defence, intelligence, security and clean energy. 

 

Though lot of promises have been made and the overall climate appears encouraging with the growth expected to be around 7.5 per cent in the current fiscal, bringing foreign investment to the country at the earliest is a indeed a big challenge. There is need for an attitudinal change both of the political leadership and the bureaucracy to ensure that the real investors find the country secured while at the same time, keeping a check on their projects and its effects on the Indian economy. 

 

All efforts by Modi to woo foreign investors and revive the economy will prove meaningless as long as there is something untoward in the country – be it economic, social or religious – which could cause concern to the international community. As he maintained recently, all efforts should be geared towards economic development and poverty eradication rather than fighting between one community and the other. Thus, the Government has to be very careful about fundamentalists who are bent to disturb communal peace and create social chaos.---INFA

(Copyright, India News and Feature Alliance)

 

< Previous   Next >
 
   
     
 
 
  Mambo powered by Best-IT