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Prime Minister Narendra Modi held a “comprehensive” meeting on Thursday to discuss the strategy to boost the battered economy, as the government may announce its first booster shot to protect lives and livelihoods after the blockade is eased the next week, development conscious people said.
There is a general consensus that the government will respond to emerging economic challenges when necessary rather than a single stimulus, they said, requesting anonymity.
But one thing is certain: all fiscal policies and measures will aim to make India a preferred global manufacturing hub where both domestic and foreign direct investment (FDI) is encouraged.
The Hindustan Times reported Tuesday that the government plans to aggressively push forward its “Make in India” program by offering national and international manufacturer policies and tax incentives to manufacture locally.
The Prime Minister’s Office (PMO) confirmed this on Thursday. “Various strategies were discussed to attract investment to India in an accelerated way and to promote Indian national sectors [in the meeting]”A PMO statement said.
“Prime Minister Modi held a comprehensive meeting to discuss strategies to attract more foreign investment to India, as well as to promote local investment in order to boost the economy in the context of the Covid-19 pandemic,” said the statement. .
The meeting, chaired by Prime Minister Modi, was attended by the Minister of Finance, Nirmala Sitharaman, the Minister of the Interior, Amit Shah, the Minister of Commerce and Industry, Piyush Goyal, the Minister of State for Finance, Anurag Singh Thakur, and other high-ranking bureaucrats.
According to the people mentioned above, the government is, however, cautious when opening the economy starting next week, since the country cannot afford another national blockade that has affected both the formal and informal sectors.
The government ordered a three-week national blockade to contain the spread of Covid-19 from March 25 and extended it until May 3. “The blockade will be facilitated next week for certain safe areas and economic activities will be carried out strictly according to the guidelines of the MHA (Ministry of Home Affairs),” said one person.
According to the person, the government is working to relax regulatory standards, remove bureaucratic hurdles, and provide tax incentives to domestic and foreign investors. This matter was also deliberated at the meeting, he said.
“It was discussed that a scheme should be developed to promote more plug and play infrastructure on the existing industrial lands / plots / farms in the country and provide the necessary financial support,” the PMO statement said.
During the meeting, the prime minister ordered that steps be taken to take a more proactive approach to control investors, analyze their problems and help them obtain all necessary central and state authorizations on a temporary basis, he said.
Various strategies were discussed to attract investment to India in an accelerated way and to promote the internal sectors of India. Detailed discussions were held on the governing states to develop their strategies and be more proactive in attracting investment, he added.
It was also discussed that reform initiatives undertaken by the various ministries should “continue unabated” and steps should be taken on a temporary basis to remove any obstacles that impede investment promotion and industrial growth, he said.
N Venkatram, CEO of consultancy Deloitte, said: “Swadeshi 2.0 is about manufacturing from India. This will happen if our own industrialists have the capacity to invest in India, which in turn encourages foreign investment and manufacturing by foreign companies in India. We must also analyze the necessary changes in regulation and recover the industrial mindset. We need to develop our economy to its export potential based on our competitive advantages and create jobs. ”
Mithun V, partner-M & A, Private Equity and General Corporate at the law firm Shardul Amarchand Mangaldas & Co said the move is “reassuring” for the local and global investor community. “This is also a very good time for the government to focus on encouraging investments in infrastructure and in the manufacturing sector, especially given the ongoing global backlash against our neighbor who shares the land border,” he said.
The industry called it a proper policy at the right time and said that India should strategically target each of the companies moving from China.
The CEO of the Confederation of Indian Industry, Chandrajit Banerjee, said: “We suggest that these [investment zones] They must be large areas with a special-purpose vehicle to provide approvals and authorizations, along with world-class urban infrastructure like roads, housing, and low-cost worker, sewer, and electricity facilities. Land and labor regulations can also be instituted specifically for these areas to guarantee large-scale employment, ”he said.
