Prime Minister Narendra Modi on Saturday cited a robust inflow of foreign direct investment (FDI) during the last financial year and said it reflects how global firms were looking at India as a major investment destination. He said the country is shifting its focus from Make in India to Make for World through the government’s Atmanirbhar Bharat Abhiyan (Self-reliant India campaign)
In his Independence Day speech, Modi said a series of economic reforms like one nation-one tax, Insolvency and Bankruptcy Code, and the bank merger have caught attention of the global investors. He credited the reforms for attracting huge FDI last year.
According to the Reserve Bank of India data, there was about $74.4 billion FDI flow in 2019-20 and marked a 20% jump compared to the previous year.
Modi said India should be “vocal for local” and asked citizens to glorify Indian products to promote Atmanirbhar Bharat. He referred to N-95 masks, personal protective equipment, and ventilators. Modi added Indian entrepreneurs manufactured them to meet the domestic demand amid the Covid-19 pandemic and also exported them.
Modi said India is striving to achieve overall economic growth and become self-reliant, but humanity remains its ethos. “India has always believed that the entire world is one family. While we focus on economic growth and development, humanity must retain a central role in this process and our journey,” he said. “When we talk about becoming self-reliant, we do not merely refer to decreasing import demands. …it is about our skills, our human resources. When we start sourcing things from abroad, then our capabilities start depleting and consequently, they get completely destroyed over generations. We need to preserve them and enhance that calibre of ours.”
Modi said the government has launched over Rs 110 lakh crore National Infrastructure Pipeline (NIP) to boost the economy and create jobs. “In order to rapidly modernise India, there is a need to give a new direction to overall infrastructure development,” he said. He added over 7,000 projects under NIP have been identified.
“This will be, in a way, a new revolution in the field of infrastructure. This is the time to end silos in infrastructure. There is a plan to connect the entire country with multi-model connectivity infrastructure.” He said NIP will play a crucial role in overcoming the adverse impact of Covid-19 on the economy and trigger higher growth.
The Covid-19 pandemic and 68-day nationwide lockdown to check its spread adversely impacted the economic growth, which was already sluggish. India’s gross domestic product (GDP) slowed to 4.2% in fiscal 2019-20, the lowest in 11 years. It followed precipitous growth contractions reported by the US and European countries after the pandemic closed shops, factories, and restaurants, signalling a period of recession. The US economy posted a second-quarter contraction of 9.5%, the worst figure on record.
India is expected to report its April-June GDP numbers by the end of this month. Economists expect the economy to contract by at least 5% this year (2020-21) especially because of the hard lockdown for two full months of the quarter (April and May).
The government on December 31 last year unveiled the NIP with an aim to make India a $5 trillion economy by 2024-25. The focus of the infrastructure pipeline is to accelerate growth and create employment in both urban and rural areas. The NIP is already under execution as 40% of the projects worth Rs 44 lakh crore are at various stages of implementation, officials said requesting anonymity.
Modi emphasised the need to import raw material and export value-added products to make India a manufacturing hub. “How long can the raw material be sent out of our country and finished products imported?. Atmnirbhar Bharat does not mean only reducing imports, it means enhancing our capacity, our creativity, our skills.”
Divakar Vijayasarathy, founder and managing partner at consultancy firm DVS Advisors LLP, said Modi called for Make in India in his first Independence Day speech in 2014. He said Modi has rebranded it to Make for the World to make India as a manufacturing powerhouse, which China did exceptionally well over the years. “It is high time that this strategy should be in place. India has already missed opportunities during the start of the trade war between the US and China. But Covid-19 and China’s attitude towards other nations have presented one more opportunity to take advantage of the negative perception of China.”
Deepak Sood, secretary-general of the Associated Chambers of Commerce and Industry, called Modi’s address a morale booster for the nation braving the health pandemic and making all-out efforts to turn it into an opportunity for making India self-reliant. “When the Prime Minister talks about reforms…it is a loud signal to the world how the country’s top leadership is committed to creating economic opportunities for the investors.”