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.