The Indian government’s plans around skill development and financial inclusion aimed to feed into its numerous flagship programmes with the ultimate goal to boost growth have stepped into its most critical phase this year.
The last 18 months can be seen as a hectic groundwork laying exercise for the Narendra Modi led taskforce, with time to now start seeing some rewards. Winning over the international community’s trust in the right policy climate to propel Asia’s fastest growing giant further and attracting much-needed foreign direct investment (FDI) into critical sectors of the economy can now give way to building on that trust and investment flow.
In his speech to the United Nations Sustainable Development Summit last September, Modi proudly proclaimed: “In India, we have defined a new personal sector of individual enterprise, micro enterprises and micro finance, drawing also on the strength of digital and mobile applications.
“We are focusing on the basics: housing, power, water and sanitation for all – important not just for welfare, but also human dignity. These are goals with a definite date, not just a mirage of hope.”
And it is this definitive end date that is driving each of the government’s programmes of Make in India, Digital India, Smart Cities and Skill India.
Major FDI investment opportunities for global firms:
– Make in India: Promotion of India as an attractive manufacturing hub for the world. It has attracted a 48 per cent hike in FDI between October 2014 and April 2015, compared to the previous year. A recent easing of FDI norms for 15 sectors, including defence, construction, civil aviation, broadcasting and banking, is expected to attract far larger global funds.
The Delhi-Mumbai Industrial Corridor has made considerable progress, with an MoU signed between the governments of Japan and various state governments. Four other industrial corridors in planning and feasibility stages are expected to move into phase 2 in 2016 – also offering lucrative FDI opportunities to global investors and international government-backed projects.
– Digital India: From Microsoft’s pledge to take low cost broadband to 500,000 villages and Google’s plan for more accessible low-bandwidth offerings for India to ensuring government services are available to citizens electronically through high-speed internet connectivity, there is a lot of scope for high returns in this sector – for both indigenous tech firm and global giants.
– Smart Cities: The ambitious $7.2bn plan is aimed at 500 metropolitan areas, which covers 24 state capitals, 24 business and industrial centres, 18 culture and tourism hubs, five port cities as well as three education and healthcare hubs. Of the total Smart Cities Mission budget, $29.4mn have been sanctioned to get plans for 96 cities rolling. There is clearly billions of dollars on offer for companies eyeing a slice of this investment portfolio.
– Skill India: According to estimates, India requires 347 million skilled employees by 2022. Training under various skilling programmes run by the ministry of skill development and entrepreneurship led to a hike from 5.18 million in 2012-13 to 7.61 million in 2014-15. But this year the target will need to be higher to provide training opportunities for 12 million Indians who enter the job market every year. Many foreign institutions, including Harvard Business School and University of Chicago, have already jumped on to this booming segment.