Ad­dress In­dia’s eco­nomic con­cerns

Pakistan Observer - - EDITORIALS & COMMENTS -

TIM­ING is every­thing. In be tween the po­lit­i­cally charged an­nounce­ment that Re­serve Bank of In­dia (RBI) Gover­nor Raghu­ram Ra­jan will leave af­ter his term ends and the mar­ket-shak­ing de­ci­sion by the UK to leave the Euro­pean Union, In­dia an­nounced it would ease re­stric­tions on for­eign di­rect in­vest­ment (FDI). The move has been called a sweep­ing over­haul of FDI in nine ma­jor eco­nomic sec­tors, which in­cludes re­tail, avi­a­tion and de­fence. In­dia also re­moved the need for govern­ment ap­proval on in­vest­ments in phar­ma­ceu­ti­cals of more than 74 per cent.

But In­dia still needs to do more if it wishes to con­vince the world that — in the words of Prime Min­is­ter Naren­dra Modi — it is “the most open econ­omy in the world for FDI”. While the new pol­icy does make the process of in­vest­ment eas­ier, there is lit­tle sub­stan­tive change. Even if the coun­try can con­vince in­vestors that it is a bet­ter place to park their money than China, Hong Kong or the US, In­dia will still have to face the fact that FDI, while es­sen­tial, can­not cure what ails the coun­try’s econ­omy by it­self. In­dia’s rep­u­ta­tion for a bu­reau­cratic busi­ness cli­mate and poor in­fras­truc­ture will con­tinue to put off in­vestors. Tim­ing is every­thing, and the time for Modi’s Bharatiya Janata Party to ad­dress these on­go­ing and crit­i­cal is­sues is now. — Gulf News

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