India should make the most of the conducive global environment to attract foreign investment. Explain (200 Words)
Refer - Business Line
Enrich the answer from other sources, if the question demands.
IAS Parliament 3 years
KEY POINTS
· Providing tax incentives to foreign investors to invest in areas that need funding such as infrastructure appears to be working in attracting investments such as the ones from the Abu Dhabi sovereign wealth fund
· Prime Minister of India’s meeting with the heads of global funds on Thursday to woo foreign investments was aptly timed. With the finances of the government strained due to the decline in tax revenues and increase in pandemic-related spends, it is logical to invite global funds to bridge the gap in public infrastructure and other capital expenditure.
· India’s equity market has witnessed net foreign portfolio inflows of more than Rs 95,000 crore so far in FY21.
· It is clear that the resurgence in the Federal Reserve’s liquidity boosting measures has had a large part to play in the strong FPI inflows this year; empirical data show that flows into India have a strong linkage with Fed’s actions.
· It is notable that foreign portfolio investors have preferred to invest in equities of only India and China in FY20, even as they have withdrawn money out of most other emerging markets. It is clear that these investors still believe in the demographic superiority of India and its long-term growth prospects. FDI flows so far this year are 56 per cent higher compared to the same period last year.
· The Indian government had begun its first term by wooing foreign investments to fund capital expenditure and the strategy is being repeated now. The massive investments attracted by Reliance Industries for its telecom and retail arms show that global investors are willing to put their money in India if the policies are right and the projects promising.
· Providing tax incentives to foreign investors to invest in areas that need funding such as infrastructure appears to be working in attracting investments such as the ones from the Abu Dhabi sovereign wealth fund. The Centre, however, needs to get more serious about improving ease of doing business and avoiding policy flip-flops, if these flows have to sustain.
aswin 3 years
Please review
IAS Parliament 3 years
Good attempt. Keep Writing.
Venkateshwaran R 3 years
Kindly provide feedback. Personal issues for uploading late.. I kindly reMind you that I disnt get feedback on NOV 06 SEBI question although I updated the answer on time. Thank you sir
IAS Parliament 3 years
Try to mention the relevance of Look east policy, completion of projects like Kaladan multi modal project, Chabahar project, utility of SAARC etc. Keep Writing.
Venkateshwaran R 3 years
