The Economic Survey 2021-22 has highlighted the track record of the Narendra Modi-led government in garnering FDI for India as compared to the previous regimes of the past two decades.
The Survey has pointed out that over the last seven financial years (2014-21), India received FDI inflows worth $440.27 billion, which is nearly 58 per cent of the FDI received by the country in the 21 years prior to that ($763.83 billion).
The Modi government assumed office in 2014.
The Survey said that the measures taken by the government to put in place an enabling investor-friendly FDI policy has resulted in increased FDI inflows, setting new records. FDI inflows in India stood at $45.14 billion in 2014-15 and have continuously increased since then.
India registered its highest ever annual FDI inflow of $81.97 billion (provisional) in 2020-21, reflecting a growth of 10 per cent as compared to the previous year.
The increase has been on the back of growth of 20 per cent in 2019-20. In the year 2021-22, FDI inflow grew by 4 per cent in the first six months to reach $42.86 billion as compared to $41.37 billion for the same period of last year.
The Survey document said that several initiatives have been taken by the government since April 2020 to further reform the FDI policy framework to ensure against opportunistic takeovers and acquisitions, while also facilitating an increased flow of long-term capital, global technology, processes and international best practices to support the growth of these sectors.
Global industrial activity continued to be affected by the disruptions caused by the Covid-19 pandemic. While the Indian industry was no exception to these disruptions, its performance has improved in 2021-22.
Gradual unlocking of the economy, record vaccinations, improvement in consumer demand, continued policy support towards industries by the government in the form of Aatmanirbhar Bharat Abhiyan and further reinforcements in 2021-22 have led to an upturn in the performance of the industrial sector.
The growth of the industrial sector in the first half of 2021-22 was 22.9 per cent vis-a-vis the corresponding period of 2020-21, and it is expected to grow by 11.8 per cent in the current financial year.
The industrial performance has shown improvement as reflected in the cumulative growth of the IIP. During April-November 2021-22, the IIP grew at 17.4 per cent as compared to (-)15.3 per cent in April-November 2020-21.
According to RBI studies on corporate performance, which are based on the results of select listed companies in the private corporate sector, the net profit to sales ratio of large corporates reached an all-time high despite the pandemic.
Buoyant FDI inflows amid improvements in overall business sentiments foretells a positive outlook for the industry, the Survey noted.