4. Liberalisation of India’s foreign direct investment (FDI) regime & Ease of Doing Business Ranking
It’s a notable achievement of the Indian economy over the past few years – as it has been the remarkable rise in foreign flows, and in particular, in foreign direct investment (FDI). From being considered to be among the Fragile Five among emerging markets five years ago, the Indian economy has emerged as a top investment destination, with a ratings upgrade from Moody’s Investor Services last year.
Well i must say – while the government had the good fortune of lower oil prices for most of its term, it had also had the misfortune of inheriting a messy bad debt problem, which have slowed down investments. There are two two cylinders which are considered as India’s growth engine Investments and Exports. When these two fail to fire, the Indian economy has largely depended on the other two—consumption and government expenditure—to power growth.
But we must note the fact that though the headline numbers of the World Bank’s ease of doing business rankings show a spectacular rise in India’s rankings in 2018 – this rise is driven more by methodological changes, and less by domestic initiatives. So the real translation from notebook policies to tangible benefits happen, only when they are guided along with key business practices that sets the base tone for change.
– Article by Suman Adithya Rao (SEBI Certified Research Analyst, Management Graduate in Entrepreneurship & Small Business Management)
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