Many years ago , Shakespeare wrote :
" A Rose by any other name , would smell as sweet "
English-speaking Americans have turned this around to say :
" FDI by any other means , would work as well "
They are calling their FDI , " Invest in US and get Green Card " scheme
Officially called , " The EB-5 Immigrant Investor Program " , it invites foreigners to invest in USA , through following routes :
# " Direct Investment Route " , which requires,
* Starting a new Business and creating at least 10 full time local jobs by bringing in $ 1 million
But this process is very cumbersome
# " Central Investment Program " , which requires,
* Bringing in and investing $ 500,000 in a Government approved EB - 5 project in America
* Get your full money back after 5 years
* If you are lucky , you may earn 0.5 % - 1 % return every year
In 2015 , 18,000 foreign citizens invested ( approx ) $ 9 Billion in US under these programs - peanuts compared to a total of over $ 231 billion worth of FDI in USA in 2014 . Among these were 111 Indians
Now , I admit that no foreigner is dying to get a " Green Card " in India - and therefore unlikely to take advantage of a similar scheme , if we were to launch one !
But , we can come up with a scheme that will motivate 111,000 Indians to bring in and invest $ 500 billion within ONE YEAR ! ( remember that amount siphoned out of India illegally and stashed abroad by Indians , between 2005-2015 ? )
MY SUGGESTION :
# NAME OF THE SCHEME :
EB-3 Scheme ( Earn by Bring Back Black )
# WHO CAN INVEST ?
Any Indian citizen who has stashed away undisclosed / illegal assets abroad
# WHERE CAN THEY INVEST ?
Scheme A > Repay those loans taken from Indian Banks forming Rs 7 lakh*crore of NPA
Willful Defaulters repaying bad loans will be spared prosecution
No need for Govt money ( er , Tax-Payer Money ) , to bail out those banks !
Scheme B > Invest in State-wise Infrastructure SPVs ( not Central SPVs ) , managed by Private Sector
These will be approved by each state for implementation of the following projects within the state:
* Roads / Bridges / Ports / Airports / Smart Cities / Dams / Lakes-Ponds for water conservation / Forestation
* Healthcare / Education / Skills Development / Swatchh Bharat / Methane from Garbage / Digital India
* Renewable Energy / Manufacture of Electric Vehicles / Setting up of Electric Charging Stations etc
All such State SPVs will need to be approved by the Central Government , for which the State will need to agree
for full cooperation in implementation of the Central River Interlinking Project
# HOW MUCH MUST THEY INVEST ?
No upper limit but a minimum of Rs 10 crores
# WHAT PROTECTION FOR INVESTORS ?
No questions asked as to the source of funds , whether brought in from abroad using official channels or
deposits made in CASH from local lockers ! No penalty , nor any civil / criminal action against investors
# WHAT INCENTIVE FOR INVESTORS ?
All interest / dividends paid out by the SPV , will be tax-free for 10 years if re-invested in any other similarly
# HOW LONG CAN THEY AVAIL OF THIS SCHEME ?
This scheme will open on 01 April 2017 and close on 31 March 2018
# HOW CAN INDIA BENEFIT FROM THIS SCHEME ?
* Inflow of $ 500 Billion ( Rs 34 lakh*crore ) within ONE YEAR
* Generate 50 million jobs by 2020
* State Governments will go all out to
> Motivate private sector to set-up Infrastructure SPVs within their State
> Vastly simplify government approval process
> Eliminate / Reduce , rules , procedures and permissions
> Introduce " State level Incentives " to attract those BLACK MONIES into SPVs
I believe , with introduction of EB-3 Scheme , there will be such fierce competition between the States that India's rank in " Ease of Doing Business " will jump from current 130 to within TOP FIVE !
And all of this without having to pass any law in the Parliament - and with least dependence on bureaucrats !
Dear Policy Makers :
With two years already gone without making much of a dent , I urge you to stop tinkering with INCREEMENTAL IMPROVEMENTS
Promising freebies before State Elections , won't take you beyond 2019 !
02 July 2016
www.hemenparekh.in / blogs