Prof. Biswajit Dhar talks about the relation between Make in India campaign and the net inflow of Foreign Direct Investment (FDI).
Newsclick talked to Prof. Biswajit Dhar on the relation between Make in India campaign and the net inflow of Foreign Direct Investment (FDI). Their study shows that there is no major link between the two. Bulk of the FDI comes in the form of mergers and takeovers. This just changes the ownership of various companies. It does not add to the productive capacity of the economy. A significant proportion of Indian capital is being routed through tax-havens to evade tax and receive preferential treatment. Retained earnings from profits are being repatriated abroad by foreign companies. Instead of net foreign capital inflow, which increases the productive capacity of the country, we are witnessing net outflow from capital-scarce India. Net balance on the FDI account is turning out to be negative.