GUWAHATI, July 31 - The inflow in terms of foreign direct investment (FDI) to India is not that encouraging compared to overseas investment made by Indian investors. It suggests that Indian entrepreneurs have not found their country to be an attractive market for investment.
As India has no physical control instruments to compel the Indian investors to invest in the country, the best thing it can do is to make the Indian market attractive for the investors. Though the government has taken some initiatives in regard to ease of doing business, these have not yet become effective.
This was the observation made by noted economist and member of the Thirteenth Finance Commission Prof Atul Sarma. He was talking to The Assam Tribune here on the �Make in India� campaign and other issues.
On the issue of development of Assam, he said Assam being a resource-stressed state, it has difficulty in having a proper policy frame. �Assam is highly dependent on the Centre for the resources and the Centre does not have a policy framework for Assam,� he said. Assam should make an effort to have more resources by way of efficient ways of mobilising resources at one level and at another level it should eliminate the wasteful expenditures, he added.
Talking about the investment scenario of Assam, he said that looking into the FDI flow, one finds that five states of the country such as Tamil Nadu, Maharashtra and Gujarat with their high level infrastructure and better quality of governance, have cornered almost three-fourth of the total FDI. This is important against a backdrop of private investment becoming an important factor, as public investment alone cannot expedite the pace of development, he said.
Prof Sarma, who is also a former vice chancellor of Rajiv Gandhi University, Arunachal Pradesh and presently the chairman of the Omeo Kumar Das Institute for Social Change and Development, maintained that in a market-driven economy, to which India moved into in 1991, it is largely private investment that propels growth and development. The level and quality of infrastructure and governance attract private investment, both domestic and foreign direct investment, he said.
�An annual budget is a short-term instrument in a longer time perspective. This means there should be a clearly articulated policy framework. While articulating that policy framework, the prevailing objective conditions are to be explicitly kept in view,� he said.
�Eighty-five per cent of Assam�s people live in the rural areas and therefore, rural development is key to the overall development of the State. Again, rural development is closely linked with agricultural development,� he said.
�Agriculture supports directly or indirectly three-fourth of the total population in Assam, contributing 20 per cent to the GSDP of the State, against 17 per cent of the national average. It provides employment to about 50 per cent of the people. All these show the significance of rural development,� he added.
The economist pointed out that Assam�s agriculture sector suffers from natural calamities such as floods, dry spells and erosion, which cause heavy losses of crop, livestock, house, cultivable land and even human lives every year. �While any recent estimate of such losses is not available, one estimate for 1990-91 placed such losses at 2.4 per cent of the State�s GSDP,� he added.
�Assam has a much larger young population than India as a whole. Assam�s population in the age group of 0-25 years stands at 57 per cent of its total population in comparison to the all-India average of 53 per cent. This calls for a much larger investment in social sectors in general and in education and health in particular,� he said.
Prof Sarma was, however, quick to add that poor governance is the severest bottleneck for Assam�s development. �Governance includes suitable policy designs, effective monitoring and evaluation,� he said.