Increase in Investment by MNC


 
 
Concept Explanation
 

Increase in Investment by MNC

Increase in Investments by MNCS: The beneficial aspects of globalisation include the fact that MNCS have increased their investments in India. They have been interested in industries such as cell phones, automobiles, electronics, soft drinks, fast food and services such as banking in urban areas. These products have a large number of prosperous buyers. Due to this many new jobs have been created and local companies supplying raw materials and services to these industries have prospered.

Government Steps to Attract Foreign Investment: In recent years, the Central and State Governments in India are taking special steps to attract foreign companies to invest in India.

  • They have set-up industrial zones, called Special Economic Zones (SEZs). SEZs have world class facilities: electricity, water, roads, transport, storage, recreational and educational facilities.
  •  Companies who set-up production units in the SEZs do not have to pay taxes for an initial period of five years.  Government has also allowed flexibility in the labour laws to attract foreign investment.
  • The companies in the organised sector have to obey certain rules that aim to protect the workers' rights. The government has allowed companies to ignore many of these.
  • Instead of hiring workers on a regular basis, companies hire workers flexibly for short periods when there is intense pressure of work. This is done to reduce the cost of labour for the company.
  • However, still not satisfied, foreign companies are demanding more flexibility in labour laws.

     
     


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