“Make in India” – Principle for inviting investment

By : Shreepal Singh

In the context of “Make in India” and the “Start-up Movement”, we feel that while the need of the hour for India is to accord the top priority to these programs,  there are certain principles to be kept in mind by the government of Shri Naendra Modi when implementing them. It is so particularly in the field of inviting and investing FOREIGN direct investment.

The top priority for India should be – and in fact is – the fast development of this country. Towards this end, Shri Modi has given a slogan (addressing to international investors): “Come to India: Make in India”. Obviously, this is the only way for India – that is backward in most of the science and technological fields – to make the fast pace development.

But such an open invitation needs to be calibrated by the application of intelligent considerations.

The invitation to all and sundry  to come to India and to “make in India” whatever they want is a sure path to India’s ruin. This invitation should be graded in priority categories. These priority categories should be embedded in its policy, which should give references to some categories over some other categories.

The principle to be followed in inviting foreign investment should be: “Investment is invited only because we do not have access to cutting-edge technology in our efforts to develop.”

The cutting-edge technology manufacturing industries (like Artificial Intelligence, Robotics, Genetic Engineering, Space science industries etc.) should be given top preference by giving the foreign investors all tax exemptions, easy land acquisitions, easy governmental regulation regime etc.

Routine type of industries having old common place technologies should be welcome subject to all strict regulations, particularly forcing them to adhere to the welfare measures of the labor force.

All such industries that do not employ any new technology (like banking, insurance, brand marketing, junk food industries, petty service industries etc.) should be discouraged by imposing on them disincentives in taxes, land provision and stiff regulations. Here all guarantees of employment security,  their welfare and minimum wage regulations should be scrupulously enforced.

All these preferences or disincentives should be inbuilt in the concerned legislation (like land acquisition law, income tax, labor laws etc.).

Wisdom of the Modi government in opening up the manufacturing sector of Indian economy should be tempered with the “wisdom to discriminate” where it is required.

 

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