PM discusses investment models to boost economy
STIMULUS PMO says strategies to attract more foreign and local investments discussed
NEW DELHI: In the backdrop of the contraction in the economy due to the coronavirus disease (Covid-19) pandemic and the national lockdown, Prime Minister Narendra Modi on Thursday held a “comprehensive” meeting to discuss strategies to boost the economy, with an eye on enhancing investment. The meeting took place even as the government is in the middle of finalising the first round of economic measures to provide relief to different sectors. This, officials aware of development said, may be made public next week.
In a statement, the Prime Minister’s Office (PMO) said that the meeting discussed strategies “to attract more foreign investments into India as well as to promote local investments in order to give a boost to the economy against the backdrop of the Covid-19 pandemic”.
Hindustan Times reported on Tuesday that the government plans to aggressively push the ‘Make in India’ programme by offering domestic and foreign manufacturers policy and fiscal incentives to manufacture locally. PM Modi, in his public speeches, has also spoken of increasing self-reliance at all levels within India. The statement said: “Various strategies to bring investments into India in a fasttrack mode and to promote Indian domestic sectors were discussed.” The meeting was attended by home minister Amit Shah, finance minister Nirmala Sitharaman, commerce and industries minister Piyush Goyal, minister of state for finance Anurag Singh Thakur and other senior bureaucrats. While there was no official word on the announcement of a stimulus, which has been demanded by various industry bodies, officials have indicated that the government will continue to take fiscal and policy decisions as and when the situation warrants, and the first set of measures could come next week as the lockdown eases.
PM Modi also held a meeting to discuss ways to boost the defence and aerospace sector, which was attended by Shah, defence minister Rajnath Singh, Sitharaman, Thakur and senior officials.
“The discussions involved reforming of the functioning of the ordnance factories, streamlining procurement procedures, focused resource allocation, encouraging R&D/innovation, attracting investment in critical defence technologies and promotion of exports. PM laid emphasis on positioning India among the top countries of the world in defence and aerospace sectors, from design to production, with active participation of public and private sector fulfilling the twin objectives of self-reliance & exports,” a PMO statement said.
An official familiar with the proceedings of Thursday’s meeting said that the idea was to make India a global manufacturing hub, at a time when supply chains have broken down and the world is looking for alternatives to China to shift production bases. “The PM has always, from his first term, emphasised the need to improve India’s ranking in the ease of doing business. This has indeed happened. We now have to make a push to be able to leverage the opportunities that exist. This will also be our way to revive economic momentum.”
According to a second official, the government was approached by many developed economies to prepare India as an alternative manufacturing destination because many multinational companies are looking to exit China. India’s main attractions, he said, are its vast domestic market, cheap labour, and a stable and decisive political regime.
The statement said, “It was discussed that a scheme should be developed to promote more plug and play infrastructure in the existing industrial lands/ plots/estates in the country and provide necessary financing support.”
During the meeting, the PM also, according to the statement, directed that the action should be taken for a more proactive approach to handhold the investors, look into their problems and help them get all the necessary central and state clearances in a time bound manner. Detailed discussions were also held on guiding states to evolve their strategies and be more proactive in attracting investments, it added.
Industry bodies called it an apt policy at the right time and said India should strategically target each company which is relocating from China. Confederation of Indian Industry director general Chandrajit Banerjee said, “We suggest that these [investment zones] should be large zones with a special purpose vehicle to provide approvals and clearances, along with world-class urban infrastructure such as roads, worker housing and facilities, sewerage and low-cost power. Land and labour regulations can also be specifically instituted for these zones to ensure large scale employment.”
Commenting on the possibility of boosting India’s domestic production capabilities, N Venkatram, CEO at Deloitte India said, “Swadeshi 2.0 is about manufacturing from India. This will happen if our own industrialists have the ability to invest in India, in turn encouraging foreign investment as well as manufacturing by foreign companies in India. We also need to look at changes needed in regulation and get the industrialist mindset back.”
Mithun V, partner at the law firm, Shardul Amarchand Mangaldas & Co, said, “This is also a good time for the government to focus on encouraging infrastructure and manufacturing sector investments...”