Foreign direct investors (FDI) will be given a relationship manager who can take care of the clearances. The government is planning to provide clearances from the centre and local bodies on the same. The facility is available for those who are willing to invest over USD 500 million.
Guruprasad Mohapatra, Secretary, DPIIT stated that the government is looking to implement the facility soon. The initiative is to resolve the investors’ complaints on the tough clearance procedure in India.
FDI growth has buckled up over the last three years. That is, the Department of Industrial Policy and Promotion stated that a growth of 25% was observed in FY15, while it grew by 23% in FY16.
However, the growth did not reach a double-digit in the next three years until FY19. Worse still, the FDI growth rate fell to 1% due to the uncertainty of Lok Sabha elections and the drop in the value of Indian rupee.
Also Read: India’s Need for FDI to Boost Manufacturing Sector
After analysing the situation, the government has been putting efforts to improve the condition of FDI. Cutting down the corporate tax is said to significantly contribute to increasing FDI in the manufacturing sector.
With the rising conflicts between the US and China, a revision in corporate tax has the potential to attract FDI as the current revised structure is in line with the other economies.
The government has also eased the norms in certain sectors such as contract manufacturing, single-brand retail, coal, and others. The government has been trying hard to make the most of FDI with the economic slowdown in the background.
It wants the growth rate of FDI to see a spike and tap the opportunity created by the US-China war; many countries are trying to utilise the opportunity.
For any clarifications/feedback on the topic, please contact the writer at apoorva.n@cleartax.in
