{"id":2326,"date":"2025-09-09T05:50:25","date_gmt":"2025-09-09T05:50:25","guid":{"rendered":"https:\/\/iasquest.com\/?p=2326"},"modified":"2026-02-11T18:53:47","modified_gmt":"2026-02-11T18:53:47","slug":"parliament-and-state-legislatures-foreign-direct-investment","status":"publish","type":"post","link":"https:\/\/kingmakersiasacademy.com\/current-affairs\/parliament-and-state-legislatures-foreign-direct-investment\/","title":{"rendered":"Parliament and State Legislatures & Foreign Direct Investment"},"content":{"rendered":"\n

1. \u201cDiscuss the procedure of election of the Vice-President of India. Critically analyze his role and powers as the ex-officio Chairman of the Rajya Sabha<\/strong>.<\/strong><\/p>\n\n\n\n

SYLLABUS: GS II<\/strong> General Studies: Parliament and State Legislatures\u2014Structure, Functioning, Conduct of Business, Powers & Privileges and Issues Arising out of these<\/strong><\/strong><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

IN NEWS: Vice President Election<\/strong><\/p>\n\n\n\n

The Vice-President of India, established under Article 63, is the second-highest constitutional authority. Unlike the President, the Vice-President\u2019s role is largely legislative as the ex-officio Chairman of the Rajya Sabha, reflecting the unique blend of federalism and parliamentary democracy in India.<\/p>\n\n\n\n

<\/a>Election Procedure of Vice-President.<\/strong><\/h4>\n\n\n\n

1. Constitutional Basis<\/strong> \u2013 Provided under Article 66<\/strong> electoral College<\/strong> \u2013 Composed of both Houses of Parliament<\/strong> Lok Sabha + Rajya Sabha. Unlike President, state legislatures are excluded.<\/p>\n\n\n\n

2. Voting Method<\/strong> \u2013 Indirect election through Proportional Representation<\/strong> by Single Transferable Vote <\/strong>and secret ballot.<\/p>\n\n\n\n

3. Qualifications<\/strong> \u2013 Must be an Indian citizen, 35 years of age<\/strong>, and qualified to be a Rajya Sabha member.<\/p>\n\n\n\n

4. Conduct of Election<\/strong> \u2013 Election Commission of India<\/strong> supervises, ensuring impartiality.<\/p>\n\n\n\n

5. Difference from Presidential Election<\/strong> \u2013 President elected by Parliament + State legislatures<\/strong>, but Vice-President elected only by Parliament<\/strong>. Reflects limited federal role.<\/p>\n\n\n\n

6. Term & Oath<\/strong> \u2013 Holds office for 5 years<\/strong>, oath administered by the President<\/strong>.\u00a0<\/strong><\/p>\n\n\n\n

<\/p>\n\n\n\n

Role & Powers as Ex-Officio Chairman of Rajya Sabha<\/strong><\/h4>\n\n\n\n

1. Presiding Officer<\/strong> \u2013 Conducts proceedings, decides admissibility of motions, bills, and resolutions.<\/p>\n\n\n\n

2. Maintains Order & Decorum<\/strong> \u2013 Ensures discipline in the House.<\/p>\n\n\n\n

3. Casting Vote<\/strong> \u2013 Can cast a vote in case of tie; otherwise does not vote.<\/p>\n\n\n\n

4. Neutral Arbiter<\/strong> \u2013 Expected to function impartially, unlike political members.<\/p>\n\n\n\n

5. Guardian of Rules<\/strong> \u2013 Interprets Rules of Procedure<\/strong> and decides on points of order.<\/p>\n\n\n\n

6. Limitations<\/strong> \u2013 Unlike Speaker of Lok Sabha, cannot head a business advisory committee or participate in House committees.<\/p>\n\n\n\n

7. Succession Role<\/strong> \u2013 Acts as President in case of vacancy until a new one is elected<\/p>\n\n\n\n

The Vice-President\u2019s election ensures democratic legitimacy through Parliament, while his role as Chairman of Rajya Sabha<\/strong> upholds parliamentary discipline and federal balance. Though limited in powers, the office plays a stabilizing role in India\u2019s constitutional framework<\/strong>.<\/p>\n\n\n\n


2. Foreign Direct Investment has been regarded as a catalyst for India\u2019s economic growth, yet concerns remain about its sectoral impact and policy challenges. Discuss the opportunities and challenges of FDI in India in the context of recent reforms.<\/strong><\/p>\n\n\n\n

SYLLABUS: GS III<\/strong> General Studies: Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment.<\/strong><\/strong><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

IN NEWS:  A complex turn in India\u2019s FDI story<\/strong><\/p>\n\n\n\n

Since the 1991 economic reforms, Foreign Direct Investment (FDI) has emerged as a crucial driver of India\u2019s industrial modernization, technology adoption, and integration with global value chains. Sectors such as IT, e-commerce, and digital services have been transformed through FDI. However, recent patterns of declining net inflows, rising disinvestment, and outward investments by Indian firms raise questions on FDI\u2019s long-term developmental role.<\/p>\n\n\n\n

<\/a>Opportunities from FDI<\/strong><\/h4>\n\n\n\n

1. Modernisation & Technology Transfer<\/strong> \u2013 Boosts sectors like IT, clean energy, defence manufacturing.
\u00a0Example: Defence FDI cap raised to 74% under automatic route<\/em><\/strong>.<\/em><\/p>\n\n\n\n

2. Employment Creation<\/strong> \u2013 FDI in startups and services has created new jobs.<\/p>\n\n\n\n

3. Infrastructure Growth<\/strong> \u2013 Capital inflows into energy and logistics aid PM Gati Shakti Mission<\/strong>.<\/p>\n\n\n\n

4. Export Competitiveness<\/strong> \u2013 Automobiles and pharma use India as a global manufacturing hub.<\/p>\n\n\n\n

5. Green Transition<\/strong> \u2013 Growing FDI in solar, wind, and EV ecosystems aligns with climate goals.<\/p>\n\n\n\n

6. Digital Transformation<\/strong> \u2013 Investments in e-commerce\u00a0 have reshaped retail.<\/p>\n\n\n\n

7. Integration with Global Markets<\/strong> \u2013 Enhances India\u2019s role in global supply chains, especially in Asia.<\/p>\n\n\n\n

<\/p>\n\n\n\n

Challenges in FDI<\/strong><\/h4>\n\n\n\n

1. Short-termism<\/strong> \u2013 Investors prioritise quick profits<\/strong> over long-term commitments \u2192 weakens the industrial base.<\/p>\n\n\n\n

2. High Disinvestments<\/strong> \u2013 Disinvestments surged by 51% in 2023\u201324<\/strong> and further in 2024\u201325, eroding stability.<\/p>\n\n\n\n

3. Sectoral Imbalances<\/strong> \u2013 Services attract bulk of FDI, while manufacturing, infrastructure, and R&D lag behind<\/strong>.<\/p>\n\n\n\n

4. Regulatory & Policy Uncertainty<\/strong> \u2013 Retrospective taxation (Vodafone case)<\/strong> and shifting rules discourage investors.<\/p>\n\n\n\n

5. Outward FDI by Indian Firms<\/strong> \u2013 Driven by regulatory inefficiencies, infrastructure bottlenecks, and unpredictable policy \u2192 weakens domestic capital base.<\/p>\n\n\n\n

6. Tax Arbitrage & Treaty Routing<\/strong> \u2013 Inflows from tax havens raise doubts about genuine investment intent<\/strong>.<\/p>\n\n\n\n

7. Macroeconomic Implications<\/strong> \u2013 Declining net inflows limit India\u2019s ability to manage BoP, currency stability, and external account flexibility<\/strong>.<\/p>\n\n\n\n

<\/p>\n\n\n\n

Way Forward<\/strong><\/h4>\n\n\n\n

1. Policy Stability & Regulatory Transparency<\/strong> \u2013 Ensure predictable frameworks to inspire investor confidence.<\/p>\n\n\n\n

2. Shift Focus to Quality FDI<\/strong> \u2013 Attract investments in advanced manufacturing, clean energy, digital tech<\/strong>.<\/p>\n\n\n\n

3. Address Structural Gaps<\/strong> \u2013 Reform land, labour, and infrastructure<\/strong> to create a conducive investment climate.<\/p>\n\n\n\n

4. Balanced Regional Spread<\/strong> \u2013 Incentivise investments in Eastern & Northeastern India<\/strong>.<\/p>\n\n\n\n

5. Retain Capital<\/strong> \u2013 Check disinvestments and profit repatriations by incentivising reinvestment in India.<\/p>\n\n\n\n

6. Build Human Capital<\/strong> \u2013 Skill development to support high-value sectors. FDI remains vital for India\u2019s growth, but headline inflow numbers conceal deeper vulnerabilities. The rising disinvestments, sectoral distortions, and outward Indian investments reflect an erosion of long-term investor confidence. India must focus not just on gross inflows, but on the durability, quality, and developmental alignment of FDI. By ensuring policy stability, institutional trust, and infrastructure support, India can transform itself from a short-term investment destination to a global hub for sustainable capital.<\/p>\n