Justify the need for FDI for the development of the Indian economy. Why there is gap between MOUs signed and actual FDIs? Suggest remedial steps to be taken for increasing actual FDIs in India. (Not more than 200 words)

Economic development is best assessed through its developmental, institutional and implementation dimensions, with equity and resilience as the governing tests.

FDI supplements domestic savings, brings technology, managerial practices, global value-chain access and competition, and can create jobs and export capacity. It is especially useful where infrastructure and long-gestation capital exceed domestic resources.

The gap between signed MOUs and realised FDI reflects non-binding intent, land and environmental clearances, utility shortages, uncertain taxation, contract enforcement delays, policy changes and weak project preparation. Some announcements are promotional or duplicate existing investment plans.

Sectoral restrictions, infrastructure bottlenecks, skill shortages, shallow supplier networks and macroeconomic uncertainty further delay conversion. States also compete to announce commitments without a credible implementation pipeline or monitoring mechanism.

India should provide single-window, time-bound approvals; transparent land banks; stable tax and tariff policy; fast commercial dispute resolution; plug-and-play industrial parks; reliable power, logistics and skills. Invest India and states should use milestone-based investor facilitation, post-investment care and public dashboards to track actual inflows.

Keywords: economy; capital formation; foreign investment; FDI implementation