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Journalism of Courage
Energise the reforms agenda to revive wilting FDI. Govt doesnt have time to lose
In 2011,India received around 31.5 billion by way of foreign direct investment FDI,according to the UNCTADs World Investment Report 2012,less than Russias 52.8 billion and Brazils 66.6 billion and way below the 123.9 billion that multinational corporations pumped into China during the calender year. More worrying is the reports forecast that a rebound in global investments,which surged to 1.5 trillion in 2011 and far exceeded pre-financial crisis levels,could even out this year. Coming at a time when India has reported a record current account deficit of 4.2 per cent of GDP for 2011-12,subdued inflows both FDI and foreign institutional investments conjure up a scary prospect on the macro-economic front. Government must get its act together or risk losing out on potential inflows that could help partially bridge the deficit.
Despite the worrying forecast of global investments tapering off this year,the silver lining in the UNCTAD report is that it places China,the US and India,in that order,in the list of the hottest investment destinations for global companies over the next three years. For this to translate into investment inflows on the ground,though,the government needs to reinvigorate the flagging reforms agenda. That will show the world it means business.
