Transfer of welfare benefits straight to the account of the recipient, the rural jobs scheme named after Mahatma Gandhi that offers a legally guaranteed fall-back option to many whenever the weather-dependant rural economy suffers a shock, and a law guaranteeing food security shine through India’s welfare framework, while the Aadhaar-backed identification system powers India’s digital economy success.

Also read | P. Chidambaram on Manmohan Singh: One journey ends, another continues

A towering statesman and the driving force behind India’s economic reforms, Singh passed away on Thursday at 92, leaving a legacy that has reshaped India’s economic and welfare landscape.

“He was an economist par excellence and ensured economic stability and liberalization of the economy. He effectively handled inflation and unemployment. Additionally, when the entire world faced the financial crises of 2008, he ensured that all banks in India were stable,” M. Veerappa Moily, former Union minister of petroleum, law, power and corporate affairs, and former chief minister of Karnataka, said in a social media post. Moily, who served in Manmohan Singh’s cabinet, said Singh “was a good man, and I will miss him very dearly.”

Economic liberalization

Singh, prime minister from 2004 to 2014 and finance minister from 1991 to 1996, is seen as the visionary behind India’s economic liberalization. His reforms not only rescued India from the 1991 financial crisis, but also reshaped its economy into a globally integrated, market-driven powerhouse.

“Throughout his tenure, he had great empathy for the poor. He did not hide the fact that many millions of Indians are poor and reminded us that the government’s policies must lean in favour of the poor. Examples of his empathy are MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act) and the restructuring of PDS (Public Distribution System) and the extension of the mid-day meal scheme,” said P. Chidambaram, Singh’s former cabinet colleague and former Union finance minister, on social media website X.

Also read | Manmohan Singh, the leader who liberalized India

Singh abolished the licence raj, dismantling restrictive regulations that stifled private enterprise and encouraging entrepreneurship and foreign investment during a critical balance of payments crisis. He reduced import tariffs, slashing them to around 50% from over 300%, promoting trade and spurring domestic innovation.

Foreign direct investment (FDI) inflows surged under his leadership as restrictions eased in sectors like telecommunications, insurance and retail, boosting job creation and infrastructure development. Singh’s tax reforms simplified compliance, reduced tax slabs and lowered maximum tax rates, fostering economic activity and improving government revenues.

Inclusive growth

As prime minister, Singh championed inclusive growth through welfare initiatives like the 2013 National Food Security Act, which provided subsidized food grains to two-thirds of India’s population, addressing hunger and malnutrition.

Singh’s enduring legacy lies in his ability to balance economic growth with social equity, leaving an indelible mark on India’s development trajectory.

Under his prime ministership, the government also implemented MGNREGA in February 2006, which aims to provide livelihood security to rural households in India by guaranteeing at least 100 days of wage employment annually.

“Together with P.V. Narasimha Rao, he brought about a paradigm shift from an India ridiculed for its ‘Hindu rate of growth’—an India that faced a catastrophic economic crisis stemming from the twin deficits of a balance-of-payments crisis and a huge fiscal deficit—to an India that achieved about 7% steady growth and emerged as a growth driver of the global economy,” said Manoranjan Sharma, chief economist, Infomerics Ratings, and a former chief economist with Canara Bank.

“While advancing extensive economic reforms in India and scrapping license, permit and quota raj to extricate India from an imminent economic disaster, he was fully conscious of the compelling need to promote ‘development with a human face,’ financial inclusion, Aadhaar and MNREGA. Despite the threat to his government, he firmly stood his ground over the nuclear deal with the US and ably steered the country’s economy through the global financial crisis of 2008,” he added.

Transformative legislation

Under Singh’s leadership, the United Progressive Alliance government also introduced transformative rights-based legislation, including the Right to Education and Right to Information Acts.

These landmark laws have since become pillars of governance, shaping policies and practices across successive administrations, including the current government.

However, his ability to reform got somewhat constrained during his prime ministership due to pressures of coalition politics.

“I am deeply saddened by the passing away of former Prime Minister, Dr. Manmohan Singh, a visionary economist and former RBI (Reserve Bank of India) Governor. His contributions as the architect of India’s economic reforms have left an indelible mark. RBI joins the nation in mourning this huge loss,” RBI governor Sanjay Malhotra said in a post on X.

Also read | Manmohan Singh: The archetypical insider who guided India towards its economic potential

Indu Shekhar Chaturvedi, former private secretary to Singh and former secretary in the ministry of new and renewable energy told Mint: “I worked with Dr. Manmohan Singh for six years when he was Prime Minister of India. As we mourn his passing away, I would like to remember the person he was. I think Harish Khare (Singh’s media adviser) has got it just right while describing him as a man possessing ‘lofty decency’. Add to this his deep empathy for others, which often found expression in concern for those around him, his refusal to engage in negative conversations, even when discussing his political opponents, his ability to listen with complete attention and his love for detail in work, and you get an idea of his persona. His was a broad, liberal world view, in which smallness and pettiness had no place. In the 6 years I spent with him, not even once was there a dilution of the high standards he had set for himself. You come across such men but rarely in life. He was a person who would make you feel uplifted each and every time you met him.”

New Delhi: A nearly 26 per cent rise in FDI to USD 42.1 billion during the first half of the current fiscal year 2024-25 helped India’s gross foreign direct investment (FDI) inflows reach an impressive USD 1 trillion since the start of this century.

India has achieved a remarkable milestone in its economic journey, with gross foreign direct investment (FDI) inflows reaching an impressive USD 1 trillion since April 2000. This landmark achievement was helped by a nearly 26 per cent rise in FDI during the first half of 2024-25.

 

Ministry of Commerce and Industry in a statement asserted that such growth reflects India’s growing appeal as a global investment destination. “FDI has played a transformative role in India’s development by providing substantial non-debt financial resources, fostering technology transfers, and creating employment opportunities.” 

“Initiatives like ‘Make in India’, liberalised sectoral policies, and the Goods and Services Tax (GST) have enhanced investor confidence, while competitive labour costs and strategic incentives continue to attract multinational corporations,” the Commerce Ministry said.

 

Over the last decade (April 2014 to September 2024), total FDI inflows amounted to USD 709.84 billion, accounting for 68.69 per cent of the overall FDI inflow in the past 24 years. To promote FDI, the government has put in place an investor-friendly policy, wherein most sectors, except certain strategically important sectors, are open for 100 per cent FDI under the automatic route.

 

Further, to simplify tax compliance for startups and foreign investors, the Income Tax Act, 1961 was amended in 2024 to abolish angel tax and to reduce the income tax rate chargeable on the income of a foreign company.

 

As India continues to align with global economic trends, the government believes it is well-positioned to further strengthen its role on the global stage, fostering sustainable growth and development. 

Last Updated:December 08, 2024, 14:53 IST

FDI inflows into India have crossed the USD one trillion milestone in the April 2000-September 2024 period

FDI is important for India as it will require huge investments in the coming years for the infrastructure sector to boost growth (Representative image)

Foreign direct investment (FDI) inflows into India have crossed the USD one trillion milestone in the April 2000-September 2024 period, firmly establishing the country’s reputation as a safe and key investment destination globally.

According to data from the Department for Promotion of Industry and Internal Trade (DPIIT), the cumulative amount of FDI, including equity, reinvested earnings and other capital, stood at USD 1,033.40 billion during the said period.

About 25 per cent of the FDI came through the Mauritius route. It was followed by Singapore (24 per cent), the US (10 per cent), the Netherlands (7 per cent), Japan (6 per cent), the UK (5 per cent), UAE (3 per cent) and Cayman Islands, Germany and Cyprus accounted for 2 per cent each.

India received USD 177.18 billion from Mauritius, USD 167.47 billion from Singapore and USD 67.8 billion from the US during the period under review, as per the data.

The key sectors attracting the maximum of these inflows include the services segment, computer software and hardware, telecommunications, trading, construction development, automobile, chemicals, and pharmaceuticals.

According to the Commerce and Industry Ministry, since 2014, India has attracted a cumulative FDI inflow of USD 667.4 billion (2014-24), registering an increase of 119 per cent over the preceding decade (2004-14).

“This investment inflow spans 31 states and 57 sectors, driving growth across diverse industries. Most sectors, except strategically important sectors, are open for 100 per cent FDI under the automatic route.

FDI equity inflows into the manufacturing sector over the past decade (2014-24) reached USD 165.1 billion, marking a 69 per cent increase over the previous decade (2004 -14), which saw inflows of USD 97.7 billion, an official has said.

To ensure that India remains an attractive and investor-friendly destination, the government reviews FDI policy on an ongoing basis and makes changes from time to time after having extensive consultations with stakeholders.

The overseas inflows into India are likely to gather momentum in 2025, as healthy macroeconomic numbers, better industrial output and attractive PLI schemes will attract more overseas players amid geopolitical headwinds, experts said.

They added that despite the global challenges, India is still the preferred investment destination.

Avimukt Dar, Founding Partner, INDUSLAW, said the inflows are likely to continue in a robust form. There is strong anticipation that private equity financing in the tech sector, which had slowed down in the past, will pick up again since various funds have enjoyed good exits in the public markets and are ready to deploy again.

“The government can continue with structural reforms, particularly in the space of M&A, by nudging SEBI to make the public takeover regime more friendly for foreign players,” Dar said.

Rumki Majumdar, an economist at consultancy Deloitte India, said FDI inflows are likely to remain modest amidst expected policy changes in the US and the impact of policy stimulus on China’s economy.

Geopolitical situations may alter supply chains, and trade regulations would dampen investors’ sentiments, keeping capital flows volatile, she said, adding that the government will have to prioritise infrastructure capex with timely project execution, boost workforce skilling via PPPs and incentives, invest in digital ecosystems for productivity gains, and foster R&D for digital solutions that help inclusion and formalisation of the economy.

Commenting on the data, Manav Nagaraj, Partner, Shardul Amarchand Mangaldas & Co, said FDI in India is likely to continue to rise in all areas — early stage investments, growth capital and strategic investments.

“India as an investment destination has historically been and continues to be attractive for foreign investors across various countries, whether from the US, UK, continental Europe or Asian countries,” he added.

FDI is allowed through the automatic route in most of the sectors, while in areas like telecom, media, pharmaceuticals and insurance, government approval is required for foreign investors.

Under the government approval route, a foreign investor has to get a prior nod from the ministry or department concerned, whereas, under the automatic route, an overseas investor is only required to inform the Reserve Bank of India (RBI) after the investment is made.

At present, FDI is prohibited in some sectors. They are lottery, gambling and betting, chit funds, Nidhi company, real estate business, and manufacturing of cigars, cheroots, cigarillos and cigarettes using tobacco.

FDI is important for India as it will require huge investments in the coming years for the infrastructure sector to boost growth. Healthy foreign inflows also help in maintaining the balance of payments and the value of the rupee.

(This story has not been edited by News18 staff and is published from a syndicated news agency feed – PTI)

New Delhi: Foreign Direct Investment (FDI) inflows into India surged by a robust 45 per cent to $29.79 billion in April-September during the current financial year compared to $20.5 billion in the same period during 2023-24, according to figures compiled by the Department for Promotion of Industry and Internal Trade (DPIIT). 

The main sectors of the economy that benefited from the FDI include services, automobile, computer software, IT hardware, telecom and pharmaceuticals and chemicals.

FDI inflows lead to higher investments and job creation in the economy along with better technology.

FDI in services has increased to $5.69 billion during the first half of the current financial year as against $3.85 billion in the same period last year.

The data also show that FDI inflows in non-conventional energy stood at $2 billion.

FDI inflows for the July-September quarter jumped by 43 per cent to $13.6 billion during the current financial year compared to $9.52 billion in the same quarter of 2023-24.

In the preceding April-June quarter, the country recorded a 47.8 per cent to $16.17 billion.

Total FDI inflows, which include equity investments, reinvested earnings and other capital, grew by 28 per cent to $42.1 billion during the first half of the current fiscal year from $33.12 billion in April-September 2023-24.

State-wise the figures show that that Maharashtra received the highest inflow of 13.55 billion during April-September 2024-25.

It was followed by Karnataka ($3.54 billion), Telangana ($1.54 billion) and Gujarat (about $4 billion).

The countries from which the FDI equity inflows took place during April-Sept of the current financial year include Mauritius ($7.53 billion against $5.22 billion), the US ($2.57 billion against $2 billion), the Netherlands ($3.58 billion against $1.92 billion), the UAE ($3.47 billion against $1.1 billion), Cayman Islands ($235 million against $145 million) and Cyprus ($808 million against $35 million).