‘India needs more reforms to lure FDI’

WASHINGTON: India’s concerted efforts to strengthen the business climate and encourage investment in trade have helped attract investment, but the country needs further economic reforms to ensure sustainable and more inclusive growth, according to the International Monetary Fund (IMF).

The remarks by IMF’S chief spokesperson Gerry Rice on Thursday came in response to a question on recent foreign direct investment (FDI) announcements made by global giants like Facebook and Google in India.

In recent weeks, several international companies have pledged $20 billion FDI in India, and $40 billion this year so far.

“Concerted efforts have been made in recent years, in India, to strengthen the business climate and encourage investment in trade, and these have helped to attract investment and improve the current account financing mix and also help to contain external vulnerabilities,” Rice told reporters at a news conference here.

“Relevant reforms have included the new bankruptcy code, the national goods and services tax. These have helped to gain in India’s doing business ranking, moving up rapidly in the World Bank’s Ease of Doing Business index, up to 63 in 2020, from 100 in 2018, significant progress there, indeed,” Rice said.

“Nonetheless, further economic reforms, including labour, product mixed land, and others, and additional infrastructure investment are necessary, in our view, to attract even more investment, and to ensure sustainable and more inclusive growth in India,” he said in response to the question. Recently, IMF in its update to the World Economic Outlook projected India’s growth rate at -4.5 per cent, and then six per cent recovery, for the fiscal year 2020-21 and fiscal year 2020-22, respectively, he said.