Disinvestment in the fast lane?
Finance Minister Nirmala Sitharaman has said that the pace of disinvestment will now gain a lot of momentum. The divestments that have received cabinet approval will be taken up on an urgent basis.
The government's list of divestments is long. It includes the likes of BPCL, Container Corporation of India, Shipping Corporation, Air India, and PSU Banks. The process remains at various stages of implementation.
Unfavorable market conditions were the major roadblock in the disinvestment process. But, the market is being flooded with ample liquidity currently. Hence, the time is right for the government to speed up disinvestment.
Disinvestment is also crucial to cover up the government's annual revenue deficit. The next three months going into the budget are crucial. And we expect major announcements should come up in this quarter.
Interested in setting up a Chip manufacturing unit?
The government wants to encourage chip manufacturing in India. It has invited proposals to set up electronic chip manufacturing units. The government is also interested in acquiring any company making semiconductors overseas.
The Ministry of Electronics and Information Technology (Meity) has released an expression of interest (EoI). The ministry has also announced incentives for the semiconductor manufacturers in India.
The government is looking to increase India's share in global manufacturing under the Atmanirbhar scheme. The electronics segment is very crucial for its success.
Semiconductors are the major components in the manufacturing of mobile phones, IT hardware, and electronic equipment. Hence, setting up semiconductor plants assumes a huge significance.
FDI investment keeps pouring in India:
During April-September, Foreign direct investments (FDI) investment increased 13% to about $40 bn. Commerce and Industry Minister Piyush Goyal attributed it to India's investment-friendly policies towards overseas investors.
"India allows FDI through automatic route in almost all sectors. Even at the peak of the COVID-19 pandemic, our FDI continued growing." The minister said.
The government policies have indeed been friendly towards FDIs. It also reflects India's improved ease of doing business ranking. India has moved up by 14 spots this year. The country is currently ranked at 63rd spot out of 190 countries.
India has been a reasonably closed country until recently. Hence, it still has plenty of scope for improvement. India will need to work towards deeper economic reforms & an open economy to attract major FDI's