The Government of India continues to take steps to improve ease of doing business in India. Various reports have been published by the media recently reflecting an expected improvement in the World Bank’s ranking for India, due to be published shortly. There are other areas and partners in India’s FDI growth.
SOP for FDI Proposal Eased – The commerce and industry ministry has eased the mechanism for processing foreign direct investment (FDI) proposals by doing away with the requirement of sending the applications to the department of revenue. Amending a provision in the standard operating procedure for processing of FDI proposals, the Department of Industrial Policy and Promotion (DIPP) today said that marking of proposals to the revenue department for their comments has been “discontinued” with immediate effect.
Growth Predicted by D&B Report – The slowdown in the Indian economy has bottomed out but the pace of recovery would “critically depend” on the initiatives that the government takes from now onwards, says a report by D&B. According to Dun & Bradstreet’s latest Economy Observer Index, post the impact of the structural reforms like demonetisation and GST, there has been improvement in some parameters in the recent period. The report noted that recovery in exports, moderate interest rate, lower inflation rate, controlled trade deficit, sizable FDI inflows and the government’s commitment towards fiscal discipline are likely to pave the way for the economy to recover from the current scenario on a strong note.
UAE Investments in India – The UAE is the 10th largest FDI source market for India with cumulative FDI reaching USD 4.76 billion in the last 17 years from April 2000 to March 2017. India’s National Investment and Infrastructure Fund (NIIF) signed an investment agreement worth USD 1 billion with a wholly-owned subsidiary of the Abu Dhabi Investment Authority (ADIA). As part of the agreement, ADIA will become the first institutional investor in NIIF’s Master Fund and a shareholder in National Investment and Infrastructure Limited, the NIIF s investment management company. The move is widely seen as part of the USD 75 billion investment programme announced by the UAE in August 2015 during a visit by Prime Minister Narendra Modi to Abu Dhabi.
Invest India’s Contribution to FDI – Invest India is an investment promotion agency in which the government has 49% equity, the rest is equally divided among three industry bodies — Confederation of Indian Industry (CII), Federation of Indian Chambers of Commerce & Industry (FICCI) and Nasscom. While DIPP has a 43.5% stake in the agency, 5.5% has been transferred to 11 states (0.5% each), including Maharashtra, Madhya Pradesh, Telangana and Kerala – this makes the states stakeholders in the mission of Invest India: to woo FDI. Between October 2014 and September 2017, Invest India brought in foreign investments worth $7.4 billion, leading to the creation of 94,312 jobs, according to data available with the agency till last week. That’s still not a huge number compared with the whopping $43 billion worth of FDI that India attracted in 2016-17. But Invest India’s role in attracting FDI is only getting bigger, as it chases 571 foreign companies with a potential investment worth $83 billion.
Growth in Tourism FDI Proposed – The government wants to attract $100 billion FDI in tourism sector and generate up to 100 million jobs over the next five years. “Tourism industry has a multiplier effect on the economy…We have held discussions with CEOs of leading tourism companies to address all issues facing the sector,” tourism minister K Alphons was quoted recently after the Tourism CEO Conclave. The conclave is a part of the ‘Paryatan Parv’ initiative from October 5-25. The tourism ministry will also take up the demand of hotel industry for rationalisation of the GST rate to 4-5% for five star hotels.
Hope for Improvement in World Bank Rankings – India will leapfrog 30 places to the 100th position out of 190 countries in the World Bank’s Doing Business Report, high-level sources have confirmed to The Hindu. According to a source involved in the exercise — the report is expected to be released on October 31 — “India will hit a century.” This huge jump in the country’s ranking is thanks to reforms in areas such as ‘starting a business’, ‘dealing with construction permits’, and ‘resolving insolvency’, where it was placed a lowly 155, 185 and 136 respectively last year. The source said, “The low rank last year galvanised India to act. There was an explicit order from the PM (Narendra Modi) to ensure faster reforms to improve India’s rankings.”