Destination India

By : |April 8, 1999 0

India is trying her best to woo foreign investors.
Sure, we offer a huge market to almost all businesses, but is that
enough to have foreign players invest in the country?

According to a recent survey done by National Council
of Applied Economic Research (NCAER), India has to improve on infrastructure
and systems to be an ideal investment destination. Of the eight
factors taken into consideration, let’s see where we stand:

Bouquets
India ranked high on three very
important aspects-availability of quality manpower, size of future
markets, and enforcement of contracts.

                                 

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India, especially in the field of IT, is a sought-after
destination for hiring quality manpower. Indian IT professionals
are quite in demand, especially in the West. But this is also resulting
in brain drain.

We are amongst the most populated countries in the
world. Huge population, coupled with the fact that we are a developing
country, promises potential future markets.

Apart from these, India ranked on high the size
of the current market.

Brickbats
Though India stands high as far
as the size and potential of the market are concerned, these are
not enough to ensure sizeable foreign investment.

We hit the bottom when it comes to ethical practices
among senior government officials. Widespread corruption affected
our ratings in “ethical practices of junior levels of government”
too.

Foreign investors know that getting any document
cleared in the country is a pain. Our systems are much complicated
as compared to those in other developing nations, and corruption
adds an insult to the injury.

On factors, such as socio-political environment,
ease in import of inputs, transparency of regulatory framework,
and the general power situation, India was rated below average.

Infrastructure in the country is rated as “very
poor”. Quality of roads and railways, spread of roadways, telecom
services, are too depressing to woo the investors.

Where
do we stand

We have got two very important things-promising
market and skilled manpower. India offers a deadly combination of
skilled manpower at low salaries. But these two factors are definitely
not enough to attract foreign investments.

We need to improve our systems. Transparent systems,
good infrastructure, favorable structure of sales tax, low import
duties, stable politics, are some of the things that play a significant
role in investment decisions.

It’s time to wake up from our sleep. The government
has to take immediate steps to reduce-if not remove-corruption,
improve infrastructure, and modify tax laws. Only then can we look
forward to foreign investment leading to growing economy. Is anybody
listening?

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