“India grabs investment league pole position,” says Financial Times (FT), London. Naturally, Finance Minister Arun Jaitley is happy. According to him, this is a satisfying result since India has become the highest FDI destination for greenfield projects (measured by estimated capital expenditure).
There are some disputes about the FT figure of $31 billion for this year. Some experts point out that such a high figure may be due to the inclusion of the estimated investment and domestic capital expenditure commitments by foreign companies operating in India. The data of the Department of Industrial Policy and Promotion show just $19.4 billion in the current year.
If, however, the FT numbers are true, no doubt it is good news for us. There are two main reasons for an increased inflow of FDI. First, certainly, is the effort taken by Prime Minister Narendra Modi to visit all the major FDI source countries. The government of India claims that $19.78 billion worth of FDI came from the countries the PM has visited, which accounts for nearly two-thirds of the FDI India has received. The second reason is the prolonged global slowdown. China, the mecca of FDI, also is showing signs of serious recessionary trends. Ninety-seven countries out of 154, which classified as emerging markets, are also experiencing a decline in greenfield investments compared with the same time period last year.
A World Economic Forum report says that India moved up 16 positions in the global competitiveness index to 55 due to the improvement in its macroeconomic environment and some improvement in the infrastructure sector. RBI Governor Raghuram Rajan, after a prolonged wait, brought rate cuts which can reduce the cost of investment.
All these factors put together will certainly help the incumbent government on the economy front. But the social tensions and the spread of inhuman atrocities will take its toll even in the investment scene.
The irresponsible statements of top political leaders like Chief Ministers and Cabinet Ministers will ruin our social fabric. The issue of cow slaughter is not new to us. A committee, chaired by then member of Planning Commission Shriman Narayan, had submitted a detailed report on cow slaughter in 1962. But then, the main concern was steps to prevent the depletion of good quality cattle stock. After 50 years, we are moving backward to sentimentality rather than scientific thinking.
Atrocities against Dalits in the last few months have crossed all previous records. Women are stripped in public, and babies are burned alive. Fortunately, the President has cautioned us about the gruesome situation. Quoting him, the Prime Minister picked up the opportunity to condemn a murder over beef. Jaitley came out sharply against the forces distracting the government away from its development agenda. The extremists, who are trying to malign new opportunities, are not understanding that India will once again miss the bus due to their unwarranted hate campaign.
In this new social situation, pro-development forces should emerge cutting across all sociopolitical barriers, through a massive popular upsurge. The students and youngsters, who are going to be the beneficiaries of a developed national economy, can make thousands of campuses the centres of a pro-development campaign with a harmonious social life.
The scars of communal violence from the early 90s are being forgotten by the new generation. But the new situation is slowly consolidating into a communally tense atmosphere. If Prime Minister Modi is serious about his own development agenda (which may take off due to several reasons), he should convene an all-party meeting to explain the opportunities in terms of economic development and contain social tensions with an iron fist.
John is member of Kerala State Planning Board
cpjohn.kerala@gmail.com