Why India Is Loosing FDI Investments?
The circumstances do not differ a lot in the power sector too, with all these social and unprofessional constraints, entrepreneurs face unwanted obstacles after which behavioural implications are obvious. At the end of the story, they are left only with options such as:
a. They will shift out of tradable sectors like manufacturing, where they will not have to go through all the unwanted trouble.
b. Within tradable sectors, entrepreneurship will move to areas where regulatory intensity is less.
c. The investment opportunities will pass on to non-tradable sectors, where the global competition will be less and it is easier to pass on the cost of all the payoffs to consumers - with real estate and infrastructure being good examples.
Bottom Line:
Concluding the agenda, Kapur wrote that the roots of all these problems lie in the sheer dysfunctionality of Indian government and the existence of social hinderers like mafia. One could dispute that many of these issues can be taken care by the state government but the finance minister can hardly disavow that the current position of India has been growing by leaps and bounds in the decade which has been ruled by the United Progressive Alliance (UPA) government.
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