A decline in foreign direct investment (FDI) amid a global slowdown has the government worrying as it is trying every possible measure to attract investors, a top government official said.
"We are trying to implement more measures to improve ease of doing business to retain investors," said the official.
According to him, the only concern before the country's economy at present is a likely decline in FDI in the current fiscal. Other economic indicators such as inflation, fiscal deficit, and current account deficit are faring well compared with other countries, he said.
To boost investor sentiments, the official pointed out, the government has listed “Jan Vishwas (Amendment of Provisions) Bill, 2023” to reduce the compliance burden and ease the backlog of court cases. The bill seeks to decriminalize minor offences by amending 183 provisions across 42 acts administered by 19 ministries.
“The bill encourages ease of doing business as it decriminalizes minor offences by replacing them with monetary penalties. It is also addressing the issue of outdated rules and regulations which dampens the trust of investors,” the official added.
The centre is already pushing for infrastructure development, simplification of the taxation system, digitization and easing of trade regulation to boost investors’ sentiments, the official added.
FDI to India dropped 22% to $46 billion in FY23, following a fall to $58.77 billion in the previous year from $59.63 billion in FY21.
The latest decline was owing to a decrease in inflows in computer hardware, software and the automobile industry.
In a recent written reply to the Rajya Sabha, Minister of State for Commerce and Industry Som Prakash had pointed to "various protectionist measures" adopted by major countries after the pandemic to reduce their dependence on foreign countries as a possible reason affecting investor sentiments towards India.
He further stated that there has been a decline in the real GDP growth rates of Singapore, the US and the UK, which are the major source countries for FDI.