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Published by George Varghese

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Published by: George Varghese on Aug 30, 2012
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Is FDI in retail, the only resort to revive the Indian economy?

This is really a debateable topic, as the impact on the economy can be measured only once the FDI is set up. However looking it from both the perspectives and the other alternatives to revive Indian economy will only give us some insights. While FDI in multi-brand retail is needed in the long term, its passage (if it happens) may act as a sentiment booster the market desperately needs. The global appetite to invest in India has waned in recent months, once some states implement it and others see the benefits, it may spread to other states despite the objections from the traders lobby. FDI in multi-brand retail is going to benefit existing Indian players only if foreign players buy partial or full stake in these companies. If the foreign companies go it alone or go with other partners, it will only increase competition for the existing players. What kind of an achievement will it be to have a few glitzy shops in some metropolitan cities? Some of the other avenues to revive Indian economy are: INVESTMENT IN INFRASTRUCTURE: Pump up both foreign and domestic investment -government and private -- in infrastructure projects Increase the time-to-market cycle for these projects by allowing foreign companies to enter the tendering process. This process in road, rail, cold storage and logistics, aviation, ports and distribution would definitely help. Increased connectivity within India will promote trade and entrepreneurship. India's growth reached 9% a year without any of these avenues for foreign investors. What fired the entrepreneurial energy, the animal spirits the Prime Minister referred to, was the opportunity that infrastructure companies such as Lanco, GMR, GVK and IL&FS Transportation saw in building roads and utilities. HIGH-END MANUFACTURING: Indian population can be used as an asset and employing them. Implement the integrated manufacturing policy proposed by the Ministry of Commerce in a mission-mode approach. India needs more factories to generate employment. Revive the concept of SEZs and promote them with incentives. Such a focus will increase employment, while generating consumer demand. INDUSTRY STATUS FOR AGRICULTURE: As an agrarian economy, increase the investment in bio-technology and bring in agricultural land reforms that will help farmers with small holdings get greater access to credit while allowing them to consolidate their holdings through mechanisms like Producer Companies and Self-Help Groups (SHGs). This will push up rural demand and purchasing power. ENTREPRENEURSHIP INCUBATION CELL: Young and fresh talent should be motivated in their endeavours by freeing up the entrepreneurial spirit of Indians by encouraging and incentivising them to start their factories and industries. Give special focus to entrepreneurs who bring in innovative high-end technology and generate Intellectual Property Rights (IPRs). Entrepreneurship will not only generate jobs, but will create drivers of growth.

Digitise all government records and drastically reduce all physical contact for government services. Also higher foreign investment limit in insurance and pension funds. and diluting tax proposals that even the most advanced countries have to ensure fair-play between returns from capital and labour. Digital governance will reduce delays and corruption in decision-making. There should a nation-wide policy on achieving energy security. With adequate energy and electricity. medical services. Indian youth need to be exposed to global standards and private sector should be allowed to tie-up with established foreign universities to provision high quality education E-COMMERCE AND M-GOVERNANCE: As major service sector is major contributor in GDP and well developed base of IT. Such an interlinking will also provide an inland waterway system. Interlinking major rivers will provision for adequate drinking water as well as for industrial purposes. post-graduates and doctorates in order to provide for a rapidly growing economy. factories. Access to adequate water and an inland waterway system are critical to jump-start the economy CREATE A HI-SPEED RAIL NETWORK: For an economy to prosper people need to move quickly from one city to another. Focus on higher education is critical if India needs to keep up its supply of good quality graduates. reduce corruption and will rationalise the size of the bureaucracy. India’s young population needs to be trained adequately if the economy has to grow in a sustainable manner BOOST HIGHER EDUCATION: Retention of students who goes to foreign destination and ultimately settle there should be stopped. construction technologies. Access to affordable energy is critical for industries as well as for mechanisation of agriculture INTERLINK MAJOR RIVERS: Large parts of country are either water-deficient or watersurplus. An affordable high speed rail network will pump up the growth in several core sectors like construction. but will also promote the overall economy. .ENERGY REFORMS: Unexplored mines and energy should be tapped as the country is energy and electricity deficient. industries and services-based economy cannot take off. This will bring in greater transparency. A high-speed rail network will not only integrate Indian cities. manufacturing and high-end software programming by 2020. SKILL DEVELOPMENT: India requires over 120 million people skilled in automobile engineering. manufacturing and services.

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