Risk of poor investment due to lax policy of bureaucrats

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New Delhi: In 2018, Prime Minister Narendra Modi had called for making policies for a five trillion dollar economy. However, the impact of the corona pandemic and the lockdown on the economy was seen on the prospects of the economy achieving this feat by 2025. Now the size of the Indian economy or GDP is set to cross $3.5 trillion in the calendar year 2022, according to credit rating agency Moody’s report, which has been released today.

Moody’s said India will remain the fastest-growing among the leading G20 countries for several years, but economic reforms and policy constraints could affect investment in the country. Moody’s said bureaucracy was delaying obtaining the licenses needed to start a business, extending the time to start the project.

Due to India’s bureaucracy in FDI, investment attractiveness in India is decreasing. Moody’s said Vietnam has higher delinquencies in India than other countries in its region. The demand for houses, cement and new vehicles will remain high in the country due to urbanisation, increase in the number of educated and young workforce, fragmentation of the family. Government infrastructure investment will also increase the demand for cement and steel. The growth of infrastructure and manufacturing sector will increase from 3 to 12 in the next decade, but India’s capacity will remain less than China even till 2030.

Slow implementation of policy decisions and lax policy of economic liberalization in India risks reducing investment and manufacturing growth potential in India.