Foreign direct investment (FDI)

                                   Dr Manmohan Singh Father of economic liberalisation in India

               

            Everyone in India today is talking about FDI.Even I am very much interested in the subject.I follow politics very closely and would one day like to join politics.Being part of politics we can bring in a positive change in our country and touch upon lives of people.FDI is nothing but foreign direct investment in various sectors in India.It means we are opening various sectors of economy to foreign companies and allow their investments in India.We have opened up ecomony since 1991 for FDI in sectors like computer software,hardware,manufacturing,infrastructure etc.

           When Dr Singh allowed FDI in manufacturing in year 1991 people called him a traiter selling country to foreigners.But with great courage Dr Singh with backing from then PM P V Rao opened up economy in manufacturing.Till then in India licence from government was needed to start any business.This encouraged corruption and only few people were awarded licence to do business.This killed competition,innovation and creativity in Indian companies.For example Bajaj was the only company allowed to make scooters in India,Mahindra's were assembling  old Willys Jeep.Even number of vehicles to be manufactured was dictated by government policy irrespective of customer demand.So people were forced to wait very long time to buy an inferior product like Bajaj scooter or an ambassader or Maruti 800 car.This was because customers had no choice available to them with very bad customer care.We had a Bajaj Chetak scooter purchased in 1986 with full advance payment made in dollars and had to wait for 6 months to get the delivery.When ecomony was opened for global manufacturing companies we had FDI flowing from companies like Toyota,General motors,Ford,Mercedes Benz,BMW,Honda,Hyundai,Volkswagen,Fiat etc.

          When Dr Singh allowed FDI in manufacturing people said Indian companies like Bajaj,Tata and Mahindra will close down as they wont be able to compete with global gaints like Toyota or General motors in terms of resources and technical know how.But when Indian ecomony was opened to global competition it made Indian companies to improve on their R&D,quality and customer centricity to survive the global onslaught.If we were to look back after 20 years when FDI was introduced in manufacturing it was good for the country,people and all companies.Today Indian companies have improved so much that they are on par with global companies.Products like XUV5OO,Pulser,Indica are examples of engineering capabilities and progress of Indian companies in past 20 years.FDI in manufacturing has increased employment in India  and has given us choice of good quality products.I have personally benifited from it working with Indian Auto gaint Mahindra and Global auto gaint Mercedes Benz.RecentlyTata has acquired British company Jaguar and Land rover and Mahindra has acquired Korean company Sangyoung increasing the foot print of Indian companies abroad.

           Today we in India are one of the largest manufacturers of automobiles and our engineering knowledge is respected across the world.This would'nt have been possible  without opening up of economy in 1991.The same logic applies for FDI in retail and aviation too.They will prove benifical to country in long run.The people opposing FDI in retail are same people who back in 1991 said introducing computers is bad for India and it will create large scale unemployment in the country.Today computers have created more jobs and India is the leader in software developement.Now in India shoes and chappals which we wear on our feet are sold in air conditioned shops as FDI in single brand retail is allowed.Vegetables and meat which we eat are sold in unhygenic conditions on roads.FDI in mutibrand retail will insure vegetables and meat will be sold in hygenic conditions.FDI in retail will ensure better supply chain,cold storage for preserving perishable food items.FDI in retail will remove the cunning middle men from system and give better prices to farmers when retail gaints will start buying directly from them.This will eventually reduce the price of essential goods for the consumers.