Centre lining up new steps to woo investors
Will rope in an agency to assist DPIIT on formulation of FDI policy, monitoring EoDB reforms
image for illustrative purpose
Filling Gaps
- So far SIP has not been very successful
- In 2023, there was a fall in FDI
- Pvt investment too not encouraging
- Govt hopes that its pro-reforms approach will attract investors
New Delhi: In its endeavor to attract industrial investment, both domestic and overseas, the Narendra Modi government has hit the ground running. Within days of swearing in, the central government has begun the process to evaluate the Scheme for Investment Promotion (SIP) for 2021-26.
It will soon appoint an expert agency or institute to assist the Department for Promotion of Industry & Internal Trade (DPIIT) under the Ministry of Commerce & Industry. The DPIIT is mandated with the task of formulation of foreign direct investment (FDI) policy, monitoring of the ease of doing business (EoDB) reforms, and investment promotion and facilitation activities.
The agency, which will be engaged by the end of this month, will be expected to give its report within four months, official sources told Bizz Buzz. The agency will assess SIP and study its impact so far. It will also support the DPIIT in effective and on-ground implementation of the scheme.
The components of SIP were: investor targeting & facilitation, domestic as well as international activities; investment promotion, amplification & outreach activities; project management activities; and foreign travel.
Evidently, SIP has not been very successful; in the last calendar year, for instance, there was a fall in FDI. Private investment has not been much, though the government hopes that its pro-reforms approach will attract investors. A few weeks ago, the International Monetary Fund (IMF), while pegging the Indian economy at 6.8 per cent for 2024-25, said that public investment remains the primary growth driver.
The DPIIT wants to change that. It wants the assisting agency to recommend strategies for: handholding and facilitating investment in future; to record and monitor domestic and foreign investment on a common digital platform; effective investor targeting and outreach activities; the ways to provide better information to the stakeholders; and improvement in output-outcome indicators of the scheme. The agency is also expected to suggest: changes required in the existing processes and methods of investment promotion; activities to be undertaken to boost investments in manufacturing that increase localization, boost employment generation, and support integration with global value chains; and justification for the continuation of SIP, if it needs to be continued.
