9.22 ndian onom
(v) Specific challenge in leather & footwear civil aviation, plantation, trading, private sector
sectors: The sectors use raw hides and skins banking, satellite establishment and operation and
of a number of animals like cattle, buffalo, credit information companies. By early 2017, the
goat, sheep and other smaller animals. government had taken the following policy steps
Amongst these, leather made from cattle to promote FDI in the economy:
hides has greater global demand (owing (i) Up to 49 per cent FDI permitted
to its strength, durability and superior in insurance and pension funds (26
quality)—cattle-based global exports per cent under automatic route) and
dominate buffalo-based exports by a factor defence sector.
of 8 to 9. However, despite having a large (ii) 100 per cent FDI permitted in
cattle population, India’s share of global manufacturing of medical devices;
cattle population and exports of cattle the white label ATM and railway
hides is low and declining. This trend can infrastructure.
be attributed to the limited availability (iii) 100 per cent FDI allowed in
of cattle for slaughter in India, thereby marketing of food products produced
leading to loss of a potential comparative and manufactured in India (Union
advantage due to underutilization of the Budget 2016–17).
abundantly available natural resource.
(iv) To undertake important banking
Several measures of the package approved sector reforms and public listing
by the Government for textiles and apparels in of general insurance companies
June 2016 are aimed at addressing the challenges undertake significant changes in FDI
described above. Similar provisions are needed policy (Union Budget 2016–17).
for the leather exporters. Immediate actions are
(v) Reforms in FDI policy in the areas
needed in the areas of reforming—labour laws, tax
of Insurance and Pension, Asset
rationalisation (GST will be helpful), employees
Reconstruction Companies, Stock
contributions to security schemes and articulating
Exchanges (Union Budget 2016–17).
new FTAs, etc.
(vi) A new policy for management
of the PSUs, including strategic
fdI PolIcy measures
disinvestment—this is supposed to
Foreign direct investment (FDI) is an important have liberal provisions for the FDI
driver of economic growth which helps (Union Budget 2016–17).
in—sustaining high growth rate, increasing As per the latest Economic Survey 2017-18,
productivity, a major source of non-debt India has performed very well in attracting foreign
financial resources, and employment generation. investment—
A favourable policy regime and sound business FDI policy reforms initiate in 2016-
environment facilitate FDI flows. 17 brought most of the sectors under
The government has taken various reforms automatic route, except a small negative
to liberalizing and simplifying the FDI policy list. Total inflows of FDI during 2016-17
to provide ease of doing business climate in the was US $60.08 billion—the highest ever
country that will also lead to larger FDI inflows. in a year (around 8 per cent higher than
A number of sectors have been liberalized, the preceding year). By September 2017,
including defence, construction, broadcasting, the inflow was US $33.75 billion.