Banish those FDI fears, the government is seized of the matter and is actively pursuing investors
To those who are worried that the government’s actions are scaring foreign investors away, we can only use the term used by the prime minister while commenting on Rahul Gandhi’s ordinance-is-rubbish-tear-it-up comment—the government, to quote the PM, is ‘seized of the matter’. The finance ministry, to quote a letter from the economic affairs secretary to his counterpart in telecom, has been tracking foreign direct investment (FDI) and looked very carefully into sectors that have seen a dip in FDI inflows. This exercise has tracked the ease of doing business indices in various sectors as well as states. It has even looked at the major MNCs that are not present in the country and has asked the telecom secretary for his ‘reasoned comments and suggestions at the earliest’. Some of the big global telcos who have no presence in India include, the power point attached says, Deutsche Telecom, China Mobile, China Telecommunications and Nippon Telegraph.
Now that the hard work has been done, all that the telecom ministry has to do is to chase up these telecom companies and invite them to invest in the country. It is possible the telecom secretary will write back, more so if he is a spiteful person, saying the finance ministry’s retrospective amendment on Vodafone has done a lot of the damage to India’s credibility as far as telecom players are concerned. But that’s neither here nor there since the economic affairs secretary can turn around and say the absurd penalties imposed by the telecom ministry—R38,000 crore, including a R650 crore one on Bharti Airtel for a business in which the firm earned R8 lakh—were responsible for the collapse in the India sentiment. Purists will argue that instead of chasing China Mobile, which we will turn down later on grounds it is a security threat, the government should just focus on getting a Vodafone to invest more. Of course that’s true, but why not try and aim to get China Mobile also? If it wants to get into the Indian market for strategic reasons, it may even ignore the unreasonable tax demands, the lack of spectrum and other issues that affect other investors like Vodafone.