Modi meets 3 cabinet ministers to get investments, lift economy in lockdown

PM Modi chairing a meeting of Cabinet ministers. (Source: Narendra Modi)
Prime Minister Narendra Modi on Thursday directed his three important Cabinet colleagues and officials to take a more proactive approach in handholding investors and looking into their problems to attract foreign investments as well as promote domestic investments to give a fillip to the economy against the backdrop of the Covid-19 pandemic.

Officials said the meeting was broad-based and will soon be followed by a more detailed sectoral approach. 

Modi held a meeting with Home Minister Amit Shah, Finance Minister Nirmala Sitharaman, Commerce & Industry Minister Piyush Goyal and officials to discuss strategies to woo investors.

Another official pointed out that India would also need to create enabling policies that allow the plug-and-play model of investments.

It was discussed that a scheme should be developed to promote a plug-and-play model for infrastructure in existing industrial lands, plots, estates in the country and provide necessary financing support.

A plug-and-play model means all clearances and other details will be in place before the project is awarded to any company.

The prime minister directed officials to help investors get all the necessary central and state clearances in a time-bound manner.

Various strategies to bring investments into India in a fast-track mode and to promote Indian domestic sectors were discussed at the meeting.

Detailed discussions were held on guiding states to evolve their strategies and be more proactive in attracting investments.

It was also discussed that the reform initiatives undertaken by various ministries should continue unabated and action should be taken in a time-bound manner to remove any obstacles which impede the promotion of investment and industrial growth.

The discussions were broad-based and took into account the need to improve overall assistance to investing companies, ease of doing business, and direct marketing of India’s capabilities for absorbing foreign investments.

“We will soon create sectoral action plans for industries like computer and mobile phone hardware, engineering, pharmaceuticals, and information technology. There will be another stock-taking meeting with the prime minister later,” said a senior official.

Tapping into the existing special economic zone (SEZ) model, the government may set aside certain SEZs for companies from Japan and South Korea, the official added.

India Inc has also supported the idea to set up industrial hubs for foreign nations like Gujarat government has done for Japanese firms. “We suggest these should be large zones with a special purpose vehicle to provide approvals and clearances, along with world-class urban infrastructure such as roads, worker housing and facilities, sewerage, and low-cost power. Land and labour regulations can also be specifically instituted for these zones to ensure large-scale employment,” said Chandrajit Banerjee, director general, Confederation of Indian Industry.

Another idea is to expand the US desk at the commerce and industry ministry to provide focused handholding to American companies. However, the government is not keen on providing company-specific incentives.

“Let this also be a clarion call to unshackle private capital, so that it can act as a defibrillator first and then a catalyst to kick-start and sustain the economy, leaving the government free to focus on public funding on way more pressing constituents — a litany of whom we have unfortunately had to see in these Covid-19 times,” said Mithun V, partner, M&A, private equity, general corporate, Shardul Amarchand Mangaldas & Co.

The meeting came on a day when crucial data showed that the country’s core sector industries growth contracted 6.5 per cent in March. This is much lower than the 7.1 per cent growth recorded in February.

Foreign direct investment into India dipped marginally by 1.4 per cent to $10.67 billion (Rs 76,800 crore) during October-December period of 2019-20, according to the Department for Promotion of Industry and Internal Trade.

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