Prioritise attracting foreign capital

Inflows as a share of GDP are at 2002 levels; policymakers must address structural concerns

Like a company that needs external capital to grow faster than it would just with its own savings, maintaining a steady inflow of foreign capital has always been part of the plan in India. However, this year India is likely to receive only about half the capital inflows that it did a decade ago. Capital flows as a share of GDP are at 2002 levels. As important as the discussion around trade and current account deficits is, the drop in this ratio does not receive as much attention as it deserves. After all, taking forward the example of the household