Prime Minister Narendra Modi may feel ’embarrassed’ if we ask why did he oppose the Indian government’s disinvestment policy and foreign investment in major sectors as an opposition leader in the past. After becoming the PM, he realised that foreign investment is one of the parameters to ‘judge’ development. So, it would be better for us not to embarrass the PM. Also, we don’t ask the PM why his government has taken four years to allow 100% foreign direct investment (FDI) in single brand retail and 49% FDI in Air India, the national carrier.
Is it felt that the Indian government deserves appreciation for implementing these urgent reform programmes that have been pending for long? However, there are questions, still! Although the government has allowed 100% FDI in single brand retail, why is the multi brand retail being treated differently? Again, why does the government use the word ‘nationalism’ while announcing its decision to allow foreign airlines to invest upto 49% under approval route in Air India?

One should not think of causing embarrassment to Prime Minister Modi or his government as he has made an important move. We have to admit as well the fact that the volume of foreign investment in India has increased during his tenure. During the previous UPA (United Progressive Alliance) regime, the highest FDI came in the 2013-14 fiscal – slightly more than USD 30 billion. As per reports, the FDI inflows in India touched a new high of USD 60.08 billion in 2016-17 financial year. Hopefully, the government’s move will help attract more FDIs in the coming years.
The implementation of reform programmes was very important for the Indian economy. Let’s consider the construction sector. It has been decided that 100% foreign investment will be allowed in this particular sector. For long, the construction sector in India has been facing difficulties. The lingering impact of demonetisation is visible in the low growth of construction. As a result, new investments are required in this sector.

The government’s move to allow foreign airlines to be part owners of soon to be privatised Air India was also important. The government made the move at a time when it was working on the modalities for strategic disinvestment of the loss-making Air India. The decision is expected to attract more bidders for the airline. So far in the current financial year, Air India has failed to earn one-third of the amount projected by the government through disinvestment. In such a situation, the decision to allow foreign airlines to invest up to 49% via government approved route in Air India may help the government pay-off the flag carrier’s loans. The government’s decision to hold on to around a 26% stake in Air India after the sell-off is also a wise one. The airline has suffered huge losses in the recent past. If the private capital could boost the health of Air India, then the value of the company would be much higher than the currently available price. Then, the government might also make a huge financial gain by selling the 26% stake.

The Indian PM recently expressed regret, saying that his government’s efforts to implement reform programmes failed to impress a section of people in the country. He made the comment while talking about the Goods and Services Tax (GST). The PM also said that the reform of indirect tax structure was necessary, as other countries had already done this.

Perhaps, the PM fails to realise that ‘aimless’ implementation of reform programmes invites criticism. India has taken more than seven years to introduce the GST. But, the newly-introduced GST is not flawless. As a result, it creates troubles for the traders. Hope, Modi will understand that the implementation of reform programmes is necessary…..but it’s also important to implement the programmes in a right manner. The current reforms may be stated as examples of that.

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Published by Koushik Das

Koushik Das (born on May 16, 1976 in Kolkata) is a career journalist. Based in the Indian capital of New Delhi, Koushik writes mainly about foreign policies and current geopolitical issues, and rarely about other topics. His own political ideas are highly influenced by Antonio Gramsci, Louis Althusser, Michel Foucault, Michael Oakeshott and others. English philosopher and political theorist Oakeshott (Dec 11, 1901-Dec 19, 1990) says that “in political activity, men sail a boundless and bottomless sea. There is neither harbour for shelter nor floor for anchorage, neither starting-place, nor appointed destination. But we have to keep afloat”. (Rationalism in Politics, 1962) As a student of Political Science, Koushik loves to share his views on issues, which have great impacts on his thought process (and also on India, South Asia and of course on the global community), with his readers through his website – Boundless Ocean of Politics. By doing so, he tries to keep himself afloat. You will find some of his articles in https://inserbia.info/today/ (https://inserbia.info/today/author/kou_das13_i/), as he has been trying to assess the global geopolitics since 2003. You can also mail him at kousdas@gmail.com View all posts by Koushik Das