With rising CFPI inflation, decreasing GDP growth rate, which is below 4.5%, four-decade high unemployment at the rate of 7.5% the crisis in-country deepen. Private consumption has failed to lift, combined with high agrarian crises and even the manufacturing units are being closed. If OPEC countries increase the price of crude oil the food price will shoot up, causing severe depression for the low-income groups.
Even the big companies are not left unaffected, which has resulted in an unprecedented unemployment crisis. And if some major steps are not taken it could affect foreign investment in the country. Recently a US-based Western Asset Management, which manages $ 453 billion in assets, an affiliate of Legg Mason Inc. is reducing its Indian government bond holdings. Instead, the company is divesting its funds into Malaysian and Chinese debt.
Interestingly enough all the euphoria of economic boom, development, the return of old glory and a dream of better days are seeming now fainting. major decision s on economic reforms through FDI seems to be hanging.
Remember the Elphentine project of Bullet Train that was supposed to complete by 2023, between Ahmedabad and Mumbai, covering 156 Km. The 1.1trillion rupee ($15billion) project from PM Modi and Japanese Counterpart Shizo Abe who attended a ceremonial groundbreaking event in September 2017, with 81% of construction costs to be financed by the Japan International Cooperation Agency at an interest rate of only 0.1%. Payments, spread out over 50 years, will begin 15 years after the loan is received. scheduled for completion in December 2023, the high-speed link has a maximum speed of 320kph and services. The project is facing stiff opposition from farmers and tribal people whose land is needed for the project, and their former ally Shiv Sena who had objected to the project even when the party was part of the BJP led coalition.
Another important project with Saudi Arabia, India’s largest export destination at $19.4 billion after China and Japan. Saudi Arabia is believed to invest$100 billion in India, in areas of energy, refining, petrochemicals, infrastructure, agriculture, and mining. Saudi based oil giant Aramco with 20% stakes in Reliance Industries (RIL) had planned to build the largest Greenfield refinery at Nanar village in Ratnagiri district, 400km from Mumbai. But due to opposition from the locals of the area who were not provided with adequate assurance or making them a partner in the huge investment, the project has been relocated to neighboring Raigad has been put on halt. For all these troubles to some extent, the government has to take responsibility which is a result of last year’s changes in the country.
After projects after projects have come into halt increasing the economic distress in the market. However, the positive fact for the present has attracted foreign investors to invest in the distressed asset market.
But the blowback over the vociferous criticism of India’s policies over the implementation of discriminatory CAA, the much-debated NRC, revoking of Article 370 in Kashmir will eventually affect India’s trade with Gulf nations and Muslim countries. The organization of Islamic Countries (OIC), has been pressurizing Saudi Arabia and UAE to succumb to the Hindu-Muslim Narrative and withdraw their subtle support from India.
Even many European countries have started showing their discomfort in investing in India over the present conditions when the whole nation has swollen to raise slogans against the government’s draconian laws without keeping the interest of people in mind.
How the center is going to handle the whole economic crisis is the biggest question of the hour. A lot of initiatives are to be made for, making foreign investors optimistic about their investments in India but at the same time has to keep the interest of their citizens into consideration who after all matters most.