Punching holes in the government’s claims on success of Make in India campaign, an analysis by two renowned experts reveals that the programme may not have yet made any impact on FDI into focus sectors.
The investments should be examined from the point of view of fresh capacity addition in the domestic production and not on account of round-tripping of funds, the report said.
“Statements regarding the contribution of FDI to India’s development which ignore these critical features of FDI would be misleading, if not mischievous.
India should start taking an objective view based on appropriate empirical evidence,” it said. The report was prepared by K S Chalapati Rao, Professor (Retd), Institute for Studies in Industrial Development (ISID), and Biswajit Dhar, Professor, Jawaharlal Nehru University.
The policy brief was based on a study being conducted at ISID. The ‘Make in India’ initiative was launched in September 2014 with an aim to promote India as an investment destination and a global hub for manufacturing, design and innovation.
Under this programme, the government is focusing on 25 sectors including defence, food processing and leather. The report also showed that FDI under the automatic route fell by nearly 30 per cent during April-August period of 2016-17 fiscal.
“FDI equity inflows through the automatic route, which allows foreign investors to take their own decisions without waiting for specific government approval, fell by almost 30 per cent during the first five months of the current year,” the report said.