Thrust on self-employment and capital formation will be India’s focus as it gears up for a post-Covid era. The government is also in the process of identifying a few sectors which will drive growth in the coming years, as it goes ahead with the integration process of domestic manufacturers with global supply chain. These include pharmaceutical, telecom, artificial intelligence, services and micro small and medium enterprises (MSMEs) among others.
“We understand that jobs are critical in the post-Covid phase and our efforts will be to boost self-employment and enterprenuership partcicurlay MSME sector, at every stage and this will also boost demand,” Gopal Krishna Agarwal, BJP’s national spokesperson on economic affairs, told IN.
Acknowledging that the economy was going through a tough phase as the pandemic spread across the country and outside, Agarwal said that the government was aware of the fact that demand remained weak at this stage. “We expect demand in the short term to be driven by the rural sector. That apart, it will also come from industrial and infrastructure development which includes building of affordable housing, roads and airports,” the party spokesperson said, adding that over Rs 1 lakh crore has been totally allocated for the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).
This, however, cannot be a tool for sustaining jobs and economic growth in the long run, he said. “I agree that MGNREGA is the need of the hour but we need to focus on long-term job creation and economic growth for which self-employment is important as much as investments from both domestic and foreign players,” Agarwal added.
“Our economy will progress faster with integration with global supply chain,” he said. “While we are in the midst of the corona crisis, we must also remember that the pandemic has provided us a huge opportunity to attract foreign direct investment, especially in greenfield projects with many multinational companies looking for setting up their manufacturing base in India. A lot will depend on states as they have the land banks, power and they give most clearances. The Centre has a supportive role with regards to FDI and taxation poplicies,” Agarwal said, adding that the Indian economy has to integrate with the global supply chain to reap the fruits.
Many companies have already evinced interest in shifting their manufacturing facilities outside China, which is now under a global spotlight not only for its role in handling the coronavirus pandemic but also its recent political and military aggression.
Last week, American tech giant Google announced a $10-billion investment in India, which will be made in the next five to seven years. Taiwanese major Foxconn and South Korean giant Samsung have already announced to ramp up investments in the country.
Earlier speaking at the India Global Week, Prime Minister Narendra Modi said that reform measures were underway and that India was ready to roll out the red carpet for foreign investors. “India remains one of the most open economies in the world. India is laying a red carpet for all global companies to come and establish their presence in India. Very few countries offer the kind of opportunities that India does today,” he said, adding that there were multiple opportunities in various sunrise sectors.
In January, Amazon India announced an investment of $1 billion aimed at digitizing small and medium businesses. The investment is expected to create one million jobs by 2025. The same month, Mastercard announced its investment plans of up to $1 billion in the country. This would be done in five years to double-up its research and development efforts for the Indian market.
FDI into India touched $49.97 billion in FY20 from $44.36 billion a year earlier—a 13 per cent jump. According to official data, Singapore was the top FDI source, accounting for $14.67 billion..
