Prime Minister Narendra Modi on December 19 hard sold his government’s reforms spanning manufacturing to taxation and labour, claiming they have changed the world’s perception about the country from “why India” to “why not India” and quoted record foreign investment during the pandemic as a testimony to that.
Speaking at industry association Assocham’s Foundation Week event, Mr. Modi said agriculture reforms brought in by his government six months ago had started benefiting farmers.
“There was a situation in the past when investors would question ‘why India’ (for investing in the country). With reforms (of the past six years) and their effects, the perception has changed to ‘why not India’,” he said.
He said 1,500 old and obsolete laws were scrapped and new laws in tune with the changing investment order were framed.
“Earlier, investors cited high tax rates to say ‘why India’ but today, (corporate) tax rates are so competitive that they say ‘why not India’,” he said. India has also eased compliance burden in the new labour laws, he said.
“Red tape previously made investors say ‘why India’ but a red carpet is now making them say ‘why not India.’”
India now has an ecosystem that promotes and nurtures start ups, Mr. Modi said. “Earlier, there was so much government interference that investors said ‘why India’. Today, the faith reposed by the government in the private sector and encouragement of foreign investors have made the same people say ‘why not India,’” he said.
He stated that new India was pushing towards Aatma Nirbhar Bharat (self-reliant India).
The government’s main focus is on manufacturing; production-linked incentives have been given to boost domestic capabilities and capacity, he said.
The Prime Minister called on the industry to make all efforts to make India self-reliant. “The world trusts the Indian economy. Record FDI and FPI during pandemic is testimony to that.”
Mr. Modi asked the industry to adopt the best corporate governance and profit-sharing practices. He also said investment in research and development (R&D) must be increased. “The private sector must scale up investments.”
“In the U.S., 70% of investments in R&D is done by the private sector. In India, the same is done by the public sector. A big chunk of this is in the IT, pharma and transport sectors. Today, the need is of increasing the private sector share of investment in R&D,” he said.
“More R&D funds should be set aside across sectors such as agriculture, defence, space, energy, and construction.”
“Today, when we are on mission mode to make local global, we have to react fast to geopolitical developments. A mechanism has to be developed to see how India can meet any sudden spurt in demand in the global supply chain,” he said adding there was a need for better coordination between the Ministry of External Affairs, Commerce and Trade, and industry associations.
“I would urge you to give suggestions on how to react fast and respond to global transformation, on how to develop a better mechanism,” he told India Inc.
