PM Modi meets ministers to discuss investment, booster for economy expected
Prime Minister Narendra Modi on Thursday held a “comprehensive” meeting discussing strategy to boost the battered economy as the government may announce its first booster dose to protect lives and livelihood after the lockdown is eased next week, people aware of the development said.
There is a general consensus that the government would respond to emerging economic challenges as and when required instead of a one-time stimulus, they said requesting anonymity.
But, one thing is certain that all policy and fiscal measures will be aimed at making India a preferred global manufacturing hub where both domestic and foreign direct investments (FDIs) will be encouraged.
Hindustan Times on Tuesday reported that the government plans to aggressively push its ‘Make in India’ programme by offering domestic and foreign manufacturers policy and fiscal incentives to manufacture locally.
The Prime Minister’s Office (PMO) confirmed it on Thursday. “Various strategies to bring investments into India in a fast-track mode and to promote Indian domestic sectors were discussed [in the meeting],” a PMO statement said.
“PM Modi held a comprehensive meeting to discuss 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,” the statement said.
The meeting, chaired by Prime Minister Modi, was attended by finance minister Nirmala Sitharaman, home minister Amit Shah, commerce and industries minister Piyush Goyal, minister of state for finance Anurag Singh Thakur and other senior bureaucrats.
According to people mentioned above, the government is, however, cautious while opening the economy from next week as the country cannot afford another nationwide lockdown that has hit both formal and informal sectors.
The government ordered a three-week nationwide lockdown to contain the spread of Covid-19 from March 25 and further extended it till May 3. “The lockdown will be eased next week for certain safe areas and economic activities would be conducted there strictly as per the MHA (ministry of home affairs) guidelines,” one person said.
According to the person, the government is working on relaxing regulatory norms, removing bureaucratic hurdles and providing fiscal incentives to both domestic and foreign investors. This matter was also deliberated in the meeting, he 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,” the PMO statement said.
During the meeting, the PM directed that the action should be taken for a more proactive approach to handhold the investors, to look into their problems and help them in getting all the necessary central and state clearances in a time bound manner, it said.
Various strategies to bring investments into India in a fast-track mode and to promote Indian domestic sectors were discussed. Detailed discussions were held on guiding states to evolve their strategies and be more proactive in attracting investments, it added.
It was also discussed that the reform initiatives undertaken by the various ministries should “continue unabated” and action should be taken in a time bound manner to remove any obstacles which impede promotion of investment and industrial growth, it said.
N Venkatram, CEO at consultancy firm Deloitte, 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. We need to build our economy to its export potential based on our competitive advantages and generate employment.”
Mithun V, partner-M&A, Private Equity and General Corporate at law firm Shardul Amarchand Mangaldas & Co said the move is “reassuring” for the global and local investor community. “This is also a very good time for the government to focus on encouraging infrastructure and manufacturing sector investments, especially given the ongoing global backlash against our land border sharing neighbour,” he said.
The industry called it an apt policy at the right time and said India should strategically target each of the companies 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,” he said.