The government has taken various measures to boost domestic and foreign investment in India. These include reducing corporate tax rates, alleviating the liquidity problems of NBFCs and banks, improving the ease of doing business, FDI policy reforms. , reduction of the compliance burden, policy measures to boost domestic manufacturing through government orders, phased manufacturing program (PMP), programs for production-related incentives (PLI) of various ministries. To facilitate investment, measures such as the Indian Industrial Land Bank (IILB), the Industrial Park Rating System (IPRS), the gradual launch of the National Single Window System (NSWS), the National Infrastructure Pipeline (NIP), the National Monetization Pipeline (NMP), etc. , have also been put in place.
As a result, India recorded the highest ever annual FDI inflow of $ 81.97 billion (provisional figure) in fiscal year 2020-21. FDI inflows over the last 7 fiscal years (2014-21) amounted to US $ 440.27 billion, or nearly 58% of total FDI inflows over the past 21 fiscal years (2000-21 : 763.83 billion US dollars). The top five countries from which FDI flows in equities were received in April 2014 and August 2021 are Singapore (28%), Mauritius (22%), the United States (10%), the Netherlands ( 8%) and Japan (6%). The software and hardware sector attracted the largest share of FDI inflows with 19%, followed by services (15%), trade (8%) and telecommunications and construction (infrastructure) (7% each) over the same period over the past seven years.
Group of authorized secretaries (EGoS) and project development units (PDC)
With the aim of supporting, facilitating and providing a favorable ecosystem for investors, the Cabinet of the Union approved the constitution of a group of empowered secretaries (EGoS), as well as project development units (PDC) in ministries to accelerate investments in coordination between the government and state governments and thus develop the pipeline of investment projects in India to increase domestic investment and FDI inflows.
- have now been established in 29 government departments of India, headed by officers at the level of Joint Secretaries. All PDCs execute clearly defined investor engagement strategies, which include identification of potential investors, multi-level engagement with investors who have expressed interest, active engagement with a wide range of stakeholders to resolve the problems of existing investors, develop new projects and promote existing investment opportunities.
Estimates indicate that a total of 863 investment projects are under consideration by PDCs with an investment of $ 121 billion. This includes 272 highly probable (greater than 90% probability) proposals worth $ 41 billion, 279 moderately probable (51-90%) proposals worth $ 69 billion, and long-term projects (less than 50%) worth $ 11 billion.
Production incentive programs (PLI)
Keeping in mind India’s vision to become ‘Atmanirbhar’ and improve India’s manufacturing and export capabilities, an expenditure of INR 1.97 lakh crore (over $ 26 billion) has announced in the Union Budget 2021-22 for PLI schemes for 13 key manufacturing sectors as of FY 2021-22.
The 13 key sectors include 3 already existing sectors namely (i) mobile manufacturing and specified electronic components, (ii) essential raw materials / drug intermediates and active pharmaceutical ingredients, (iii) medical device manufacturing and 10 new key sectors which were approved by the Union Cabinet in November 2020. These 10 key sectors are:
(i) Automobiles and automotive components, (ii) pharmaceutical drugs, (iii) specialty steel, (iv) telecommunications and network products, (v) electronic / technological products, (vi) white products (AC and LED), (vii) Food products, (viii) Textile products: MMF and technical textiles segment, (ix) High efficiency photovoltaic solar modules and (x) Advanced chemistry cell battery (ACC).
The PLI program for an additional sector, drones and drone components, was also approved by the Union Cabinet in September 2021. With the announcement of the PLI programs, a significant creation of production, jobs and economic growth is expected over the next 5+ years.
The programs have been specially designed to attract investment in areas of basic skills and advanced technology; ensure efficiency and achieve economies of size and scale in the manufacturing sector and make Indian manufacturers globally competitive so that they can integrate into global value chains.
PLI programs are expected to lead to significant production creation (US $ 504 billion and more), improve employment (nearly 1 crore more) and expected economic growth over the next 5 years and more.
Make in India
âMake in Indiaâ was launched on September 25, 2014 to facilitate investment, foster innovation, build best-in-class infrastructure and make India a hub for manufacturing, design and innovation. Developing a robust manufacturing sector continues to be a key priority for the Indian government.
This was one of the first ‘Vocal for Local’ initiatives that exposed the manufacturing field of India to the world. The sector has the potential not only to take economic growth to a higher trajectory, but also to provide jobs for a large pool of our young workforce.
Since its launch, Make in India has made significant achievements and is now focusing on 27 sectors under Make in India 2.0. DPIIT coordinates action plans for 15 manufacturing sectors, while the Ministry of Commerce coordinates for 12 service sectors. DPIIT also works closely with 24 sub-sectors which have been selected taking into account the strengths and competitive advantage of Indian industries, the need for import substitution, export potential and increased employability.
Investment Approval Unit (CCI)
During the presentation of the 2020-2021 budget, the Minister of Finance announced his intention to set up an Investment Authorization Unit (CCI) which will provide ‘end-to-end’ facilitation and support to investors, including pre-investment advice, provide information on land banks and facilitate authorizations at central and state level. It has been proposed that the cell operates through an online digital portal.
Designed as a one-stop-shop for obtaining all regulatory approvals and services in the country, NSWS [www.nsws.gov.in], was smoothly launched on 22sd September 2021 by Minister of Commerce and Industry Piyush Goyal. This national portal integrates the existing customs clearance systems of different government ministries / departments. India and state governments without disrupting existing IT portals of ministries / departments. Approvals from 19 ministries / departments and single window systems from 11 states havebeen integrated in phase I. Full integration of 32 central ministries / departments and 14 states would be in the next phases, all remaining states will be integrated gradually.
One District Product (ODOP)
The Indian government is working on a transformation initiative aimed at fostering balanced regional development in all districts of the country. This is called the One District One Product (ODOP) initiative, the objective of which is to identify and promote the production of unique products in every district of India that can be marketed on a scale. global. This will help realize the true potential of a neighborhood, fueling economic growth, generating jobs and rural entrepreneurship. The ODOP initiative is operationally merged with the âDistricts as Export Hubâ initiative implemented by the DGFT, the Ministry of Commerce, with the DPIIT as a major stakeholder to synergize the work undertaken by the DGFT. The main activities which are facilitated by DPIIT with Invest India under the ODOP initiative are manufacturing, marketing, branding, internal commerce and e-commerce.
As part of the initial phase of ODOP, 106 products were identified in 103 districts across the country. Considerable success has been achieved in boosting exports under the ODOP initiative.