The Big FDI Blast- Will It Bring Growth And Jobs?

The Narendra Modi government makes its most audacious push for foreign direct investment. Will it deliver the mega bucks?

- Sandeep Unnithan With Shweta Punj And M.G. Arun

At 10 am on Monday, June 20, key bureaucrats of the Union finance and commerce ministries filed into the sandstone corridors of the Prime Minister’s Office (PMO) for a crucial meeting with Narendra Modi. It was barely two days after RBI governor Raghuram Rajan announced he was not going to seek a second term. The PMO meeting to take stock of the government’s new FDI policy had been scheduled for Tuesday, but had been brought forward. The markets had by then opened ‘in the red’, with the Nifty and Sensex taking slight dips and the rupee losing 0.8 per cent of its value against the dollar.

The government was in damage control mode over ‘Rexit’ as the governor’s departure was popularly called. At 2 pm, PM Modi led the charge with two tweets from his official Twitter handle. “Key reform decisions were taken at a highlevel meeting, which makes India the most open economy in the world for FDI.”

The markets recovered from their initial dip and closed in the green. At 3.30, Union commerce minister Nirmala Sitharaman rolled out the specifics of the policy; India had flung its doors open wider to foreign investment. Foreigners could now own airlines, set up food processing firms, defence manufacturing units and buy pharmaceutical companies. It was the most assiduous wooing of FDI in the 20 years since the government had first looked to foreign exchange as a fuel to kickstart the engines of its economy