"What Is Holding The Investors Back?": Nirmala Sitharaman | Editorial With Sujit Nair | FDI | India

0:00 Namaskar. Welcome to another episode of editorial. You see when the government talks to us, they talk about how prosperous we are, how the whole world is looking at our economy, how our economy is so enamoring that every every individual in this world wants to come and invest in the economy. This is how it has been projected through social media, through whatever media. This is how it has been projected. This is the mirage that has been created. Let me tell you the reality. The reality is this time around our FDI foreign direct investment our net foreign direct investment is.3 billion that is 202425. This is a matter of concern and this is going to affect not only the rich

0:46 Indians but also a common Indian. Let's get right into the show. Now um before I get into why how analysis let's try and understand the problem you see the problem is that it is not that u nobody is investing in India it is not that foreign direct investment is not coming in India of course it is not coming in India the way it should there is no debate about it but it is not that um to 202425 it has been the worst you see foreign direct investment has been coming the way it has incoming always but somewhere down the line Indian FBI's repatriation that is happening from

1:33 India companies taking back their money is become much more higher than what it used to be and just see the screen in front of you in fact 201617 uh our net uh FDI was $35 billion 1718 $30 billion 1819 $30.7 billion 1920 $43 billion 202144 billion 2122 $38 billion 22 23 28 billion 23 24 10.1 billion and 2425 the inflow is more or less the same. It is more or less uh the same 5758 billion that has been inflow but the outflow if you notice that is the orange patch that

2:21 goes below the outflow especially from repatriation and disinvestment has almost touched $50 million. So money the outflow minus the inflow or rather inflow minus the outflow the result you get is.3 billion of FDI foreign direct investment in India. So two problems, two problems. If you bifurcate this, two problems. First of all, our inflow is less. $50 billion is no great uh inflow even if you say if you if you look at it from a gross uh uh FDI perspective and almost the same amount going out.

3:10 My god, that is dangerous. The first thing we need to understand is why are people not investing in India? And the reason is that why are Indians now not investing in India and sending money abroad? And also the fact is why are Indian foreigners who have invested in India now taking their money back? Why are they disinvesting? See the answer to all of this is one. This entire concept about ease of doing business in India. One window come to India, make in India, do in India, start up India. All this concept

3:56 is purely concept. Like most of the Bharata Janata party and Narendra Modi programs, these are all good sounding words. Beautiful caption beta campaigns campaign. These are all these sounds beautiful. Some good copywriter writes all these lines and gives it with a fantastic logo but it starts there and ends there. It doesn't move further. Now I talk about common people. I talk about middle class Indians and I'm going to continue talking about middle-class Indians while there is a notion that FDI

4:43 is something that is always bought by government efforts and by huge businessmen you know which these huge large businessmen who the government is quite supportive of. It is a myth. While we one doesn't deny that the government puts puts in effort to get FDI while one doesn't deny the government helps or government supports or there are big businessmen who gets uh FDI for India but a lot of FDI are got by common people like you and me common businessmen who goes out across the globe hustles gets investment for their particular cha company gets foreign investments and builds their

5:28 company. A lot of small and mediumsiz companies has done it. Get foreign investment, use their talent, use their exceptional talent, attract foreign investment, get it to India and start businesses in India. They have done it. But the fact is as always and every time the government has no support system for these small and mediumsiz industries. And I'm going to specifically talk about small and mediumsiz industries today. Big companies, they have their own ways to get things done. So I'm not going to bo I'm not bothered about those companies. I'm talking about small and mediumsiz companies. You see today I am scared of getting foreign investments.

6:13 I'm scared to getting foreign investment is because if I get foreign investment then I have a huge huge amount of compliance with RBI. I have to fill all those compliance for which I have to hire lawyers worth lacks of rupees. That's the first thing I have to do. I'm a small and medium business mind you cuz if I don't have a good lawyer, I will I will be I will be damned tomorrow. So I need a fantastic lawyer who will charge me a fantastic fee to get that RBI certification cleared. and RBI certification, RBI compliance, I think it's prejudiced because RBI before even looking at me, they believe that I'm a thief. I think the way it's my opinion, it's my opinion. I think the way RBI has designed their forms and their their

7:00 qualifiers as if that the person who is applying for uh FDI is a thief. They already presume that I'm going to do I'm going to violate FEMA regulations or I'm going to do PMLA. they already assume that and that is how I fill my forms. If Mrs. Nirmala Sithar Raman who once mentioned that you know she it's very frustrating what is holding the investors back is what Nirmala Sitharaman said when she was responding uh to a question at a think tank uh event about what's holding India back. She says that going by the textbook every economic activities are good and robust and dynamic. Money flows there's a normal textbook assumption. I want to ask where are the investable funds? Where are the investors? What are they

7:46 looking? What are they holding back? Ma'am, this is what is holding them back. This is what is holding them back because you look at investment from a Adani Amani and huge company perspective. Look at investment from an MSME perspective. That small businessman tries to hustle all over the world. tries to tell sell his talent all over the world to offer what he has all over the world try to get money organized in India and try to build a life for himself because there with foreign direct investment he gets it at a lesser interest he gets the money he desires he or she tries it and that's how they get it but then your compliances your compliances your RBI your RBI makes it so difficult the process is so difficult

8:32 The process is so painstaking that a common man cannot do it unnecessarily. He already has 40 50 lakhs which he can invest in lawyers and and and consultants who will consult him and help him to get that foreign direct investments. Have you ever thought about that? Have you ever done a research about that? Have you ever done a survey? Have you ever done a experience study? Please try and do an experience study madam. That is exactly how you get to know where the problems are. You can't sit in an iv ivory tower and and and then assume that everything is going fine. Everything is going according to the textbook cuz the textbook is what you wrote. That may not be relevant to the person on ground and that is not

9:18 stage one is your RBI. Stage two is there's another body called the ED, the enforcement directorate which people are scared of. It is like gustapo. People are scared of the sheer word ed. These are our organizations. These are our investigative bodies. These are supposed to be bodies that are helping us to have a better, cleaner and safer life. The name ED sends shivers down people's spine. Believe me, you you know why? Because end of the day, Ed is like that that that constable, that traffic constable who hides behind the tree waiting for

10:06 you to jump that signal and once you jump that signal, he comes from nowhere, catches you and finds you because there is no provision in our country where I could go to an ED office and I could say that listen this is my document, this is my offer, this is my investment. that I'm going to get. This is my offer. This is what I'm going to provide to them. This is what they are going to provide to me. This is the money they going to give me. Is it all okay? And Ed telling me, okay, these are the problems. You please solve these problems and then get your deal done. And then once I get the stamp from ED, I get an okay stamp from ED, then I go home happy saying that now at least I will not fall into any trouble with ED.

10:52 Is there a provision you made? Madam, shouldn't there be a provision for common people? Because a lot of so-called crimes that you hear and you see on televisions are not necessarily crimes. A lot of them are are act done out of lack of understanding, lack of knowledge and lack of of of sheer good consultants. Of course, lack of knowledge is not seen as an exemption for law. I understand that. But the fact remains at end of the day the reality is so I didn't know so I did it. Nobody told me when I was doing it that I was doing something wrong because my consultant didn't tell me. I didn't hire the world's best consultant or India's best consultant pay him in crores. I didn't

11:39 do that. Therefore I got into trouble. And now after all of this even everything is done when the money is come to me boom ED appears raids appear I'm back. I'm going behind be I'm going behind bars. You tell me how are you going to make people feel comfortable? Are you the government of India and Mrs. Nirmala Sitharaman saying that madam only rich people super rich people you know the the super businessmen uh whoever the super businessmen only they have the right to get FDI and and you know deal with FDI and deal with foreign funds and all that because nobody dares to go and check with them there'll be no raids that we have ever heard of so that doesn't

12:25 happen to them but a common man one error and you are you are tied up for life. Tied up for life. Writing to RBI and uh and and facing the enforcement directorate. Nightmares. Nightmares. People die. Get into depression. Get into depression. Businessmen have committed suicide. And you're still asking. I don't understand where the reason is. Which is what is surprising me. Ask a common man what the reason is that common man madam at times you know you should talk to common people common human beings common people in India MSMES who nobody bothers about middle class who nobody bothers

13:11 about your government definitely doesn't talk to those people and then maybe you will get a solution and I'm telling you this genuinely this is a very constructive criticism that I offer you madam because this is reality people are scared to go and take FDI. People are scared to make money in India. People are scared to to to be wealth creators in India because unless and until you're influential and you are super big, creating of wealth is dangerous. Nothing less than dangerous in India. Some compliance or another you get stuck in some cases or another you get stuck in. That's end of story for you. That's end of peace for you.

13:59 This is reality. This is a fact. And that is why most of the other countries are having a better uh inflow and outflow as far as FDI is concerned than we have. Though like you rightly said in paper, our economy is doing phenomenally well. But then that's paper. I hope this reality dawns into our country. I hope this reality dawns into people who are taking decisions, who are making decisions for us. I hope this reality, this this this this agencies that you've created that you've created for possibly a lot of it for your own political uh uh needs, these agencies work as a friend to the businessman

14:44 rather than, you know, work as a foe. Work as something that a businessman dreads. I hope I have made my point clear. Till I see you next time. That's tomorrow at 10. Namaskar. [Music]