After facing defeat in the Bihar assembly elections, the Narendra Modi-led NDA Government on Tuesday announced plans for allowing FDI through the automatic route in 15 sectors, including the construction, insurance, defence, civil aviation and banking.
By announcing this step, the Centre has expressed its commitment to poverty elimination and inclusive development, and also to make India a global manufacturing hub.
India is the fastest growing economy among major nations. The World Bank has improved India's ranking by 12 places in the 2016 Study of Ease of Doing Business. FDI has gone up by 40 percent. Several global Institutions have projected India as the leading destination for FDI in the world. The IMF has branded India as the brightest spot in the global economy, whereas the World Bank projects India's growth at 7.5 percent and even better.
To provide employment or entrepreneurial opportunities, Prime Minister has launched various campaigns like 'Make in India' and 'Skill India'. The latest in the series is the upcoming 'Start-up India' initiative. To further boost this entire investment environment and to bring in foreign investments in the country, the government has brought in FDI related reforms and liberalisation touching upon 15 major sectors of the economy.
With this round of reforms, the government has demonstrated that India is unstoppable on the path of economic development. Among the highlights are revival package for power distribution companies, freeing up labour rules and a possible push for the railways.
The road map for the phasing out of corporate tax exemptions and reduction in the tax rate to 25 percent is being drawn up. Besides this, the Startup India, Standup India plan and the rollout of the National Investment and Infrastructure Fund (NIIF) are also being worked on.
A simpler foreign direct investment (FDI) policy further easing of the external commercial borrowing (ECB) regime and changes in the public-private partnership (PPP) framework to attract more private investment could also be announced.