- India’s total FDI inflow is increasing year by year.
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Violation of FDI Norms
- Under Foreign Exchange Management Act, 1999 (FEMA) for alleged violation of FDI norms, an investigation is being conducted.
- It has been necessary for the Government to put an enabling and investor friendly FDI policy, as the onus of compliance with the FDI norms lies on the entity that is the recipient of FDI.
- The intent is to make the FDI policy more investor friendly and remove the policy bottlenecks. Some factors still hinder investment inflows into the country.
A look on India’s FDI inflow:
- FDI inflows have been going up each year, as against any of the previous years:
- The total FDI inflow is increasing year by year as seen in the above table.
- In first two years (2016-17 and 2017-18), there is a small rise in inflow. After that there is a notable increase of almost 4 billion USD in FDI inflow.
- In present financial year 2019-20, there is 6.95 billion USD inflow is observed up to April.
Growth in Manufacturing Sector
Growth of India’s Manufacturing Gross Value Added (GVA) and Gross Domestic Product (GDP) at constant (2011-12) prices:
- As the growth of manufacturing sector and Gross Domestic Product is observed from 2005-06 to 2018-19, it can be seen that the growth of manufacturing in initial five years is constantly higher than that of GDP.
- From the years 2005-06 to 2009-10, the above situation was observed.
- For the next four years, till 2013-14, GDP was higher than in manufacturing accept the year 2012-13 when both the measures were same.
- If the growth is observed for last five years, there was notable increase of almost 2 percent in manufacturing in 2015-16. GDP has also slightly increased during this year.
- During 2016-17 and 2017-18, both Indian’s manufacturing and GDP have been decreased while in 2018-19 GDP is decreased and manufacturing is increased as compare to previous year.
- Both the measures show approx. same percentage of growth such as 6.9 and 6.8 for manufacturing and GDP respectively in 2018-19.
Share of Manufacturing GVA in GDP at constant prices (2011-12)
- Latest estimates of GDP by National Statistical Office, the share of GVA of manufacturing sector in GDP at constant prices at 2011-12 for the last three years is as follows:
Government’s steps to boost manufacturing and economic growth:
- By ‘Make in India’ programme, the government aims at making India a global hub for manufacturing, research and innovation and an integral part of the global supply chain.
- ‘Startup India’ is to boost domestic manufacturing in India.
- ‘Ease of Doing Business’, Modified Industrial Infrastructure Upgradation Scheme, Business Reform Action Plan and Intellectual Property Rights (IPR) Policy are the another schemes launched by government as efforts to boost Indian economy.
- Also the procedures and policy for FDI have been simplified and liberalized.