Context: Recently, Tamil Nadu emerged as the country’s top investment destination in the first quarter of this financial year.

• But the overall fresh investment announcements in India slumped to the lowest in five years amidst a period marred by the extended pandemic-induced lockdown. 
• This is according to the ‘Projex Survey’ released by Projects Today, an independent firm that tracks investment projects in the country.

Key points

• The southern State accounted for 18.63% of the Rs 97,859 crores of investments envisaged to execute 1,241 projects in the country.
• The survey noted that while States like Tamil Nadu and Maharashtra held investors meet and signed MoUs, Uttar Pradesh, Madhya Pradesh and Karnataka reworked labour laws, started building land banks and sent feelers to foreign companies for investing in their States.
• The two data centres are proposed in Maharashtra, which was second to Tamil Nadu with fresh investments worth Rs 11,228.8 crores. Maharashtra had signed 12 MoUs with firms from Singapore, South Korea and the U.S.

Factors favouring Investment

• India has all the potential to be the contract manufacturer of the world in areas such as automobile ancillaries, smartphones, electronic items, capital goods, food processing, pharmaceuticals, chemicals, etc.
• It also has the required labour force in abundance. However, the country’s slow-moving official machinery, archaic land and labour laws are some of the things preventing foreign companies from bringing in their technology and capital to India.
• It is high time to address these issues at the earliest at the Central and State governments’ level.

Impact

• Fresh capacity additions are expected in the healthcare and pharma sectors ‘with immediate effect.
• The coming quarters will also demonstrate the efficacy of the Centre’s stimulus package that included financial and fiscal reforms along with steps to enhance the agriculture and small scale industries in attracting foreign and domestic private capital.