The government has identified investment prospects worth Rs 1.02 lakh crore across sectors overseen by 23 essential ministries and departments, as it seeks to rapidly rekindle development impulses by means of a virtuous cycle of investments and soften the Covid blows to the economy.
An empowered group of secretaries (EGoS), set up in June below Cabinet secretary Rajiv Gauba, has asked all wings of the government to vigorously pursue investment proposals possessing higher possible of fruition, official sources told FE. Secretaries have been asked to monitor pending foreign direct investment (FDI) proposals and make certain speedy clearances.
According to a DPIIT assessment, the petroleum ministry has the highest possible to draw investments (Rs 15,403 crore), followed by the ministry of electronics and IT (Rs 14,587 crore) and the chemical compounds and petrochemicals ministry (Rs 14,241 crore).
It has identified a total of 806 investment prospects and shared these with the project monitoring cell of respective ministries final week for additional push. Prospects in departments, which includes steel, housing, heavy industries, commerce, financial affairs, textiles and meals processing, are also integrated in this assessment.
Meanwhile, the division of pharmaceuticals has received as numerous as 215 applications from investors below the production-linked incentive (PLI) scheme for bulk drugs and yet another 28 for healthcare devices, reflecting their attractiveness. The list of eligible beneficiaries will be finalised by February. Incentives below each the schemes total Rs 10,360 crore more than 5 years.
The thought is to finish an investment famine that had set in even ahead of the pandemic. Given that overleveraged, Covid-hit domestic private investors have reduce down on fresh expansions, the reliance on FDI has risen substantially.
Despite the Covid gloom, FDI inflows in equity grew 15%, year-on-year, in the 1st half of this fiscal to $30 billion. But a sizable chunk of it was drawn by only a single player — Reliance Jio.
Investments stay important to the country’s resurgence story, as private consumption has been badly bruised by earnings losses in the aftermath of the pandemic.
Although a contraction in gross fixed capital formation substantially narrowed from 47.1% on-year in the 1st quarter to 7.3% in the 3 months by means of September, it nevertheless remained far beneath trend. Private consumption, meanwhile, shrank at a more rapidly pace of 11.3% in the September quarter.
With the enterprises going by means of the reset phase immediately after the substantial lifting of the lockdown curbs, the government hopes to make a sustained push now to draw investors.
Addressing a virtual round-table of mainly foreign investors, Prime Minister Narendra Modi, in November, promised “whatever it takes” to make India the engine of worldwide development. He invited the top rated executives of 20 worldwide pension and sovereign wealth funds that collectively handle about $6 trillion in assets to be component of the country’s “exciting progress ahead”.
The government in 2019 drastically reduce the corporate tax price to just 15% for setting up new manufacturing units in a bid to spur elusive private investments. But the outbreak of the pandemic dashed its plans.
It produced renewed efforts in the aftermath of the pandemic by announcing 13 PLI schemes, covering sectors which includes telecom, electronics, auto component, pharma, chemical cells and textiles. It pledged investments of close to `2 lakh crore more than a 5-year period to woo investors and increase domestic manufacturing.