A torrent at the FDI floodgates
The government is keen to allow higher foreign direct investment (FDI), improve the country’s infrastructure and modernise agriculture .
By TNN |
MUMBAI: The government is keen to allow higher foreign direct investment (FDI), improve the country���s infrastructure and modernise agriculture for achieving an economic growth rate of 9-10% in the medium term, Planning Commission deputy chairman Montek Singh Ahluwalia said on Sunday.
���According to the common minimum programme, the country can absorb three times the current FDI, it is getting,��� he said. Mr Ahluwalia said the government is considering a review of ceilings for FDI in certain sectors. He said that modernising agriculture was a high priority area and the government was looking at private sector participation in farming.
���While the government played a key role in taking the country to a food surplus stage, private participation would be necessary, to link farmers to new market realities,��� he said.
Prime Minister Manmohan Singh on Saturday, said the country could hope to reach 9-10% growth, basing this goal on high savings and investment rates in India. The PM had said that the savings rate is now over 29% of GDP and investment rate at 31% of GDP.
The key drivers of economic growth, according to Mr Ahluwalia, are a business-friendly economy, higher flow of FDI and surge in private sector confidence. Mr Ahluwalia was speaking at the 16th Asian Corporate Conference in Mumbai. Mr Ahluwalia admitted that there were concerns about possible hindrances for foreign investors and joint ventures such as Press Note 1.
However, he allayed these apprehensions, saying that foreign companies could enter into contractual agreements that did not bind them by regulations. He said the quality and availability of infrastructure could be a potential roadblock for economic development. ���We are aware of a huge gap between India and East Asia in infrastructure facilities. There needs to be a policy framework, whereby private companies would be encouraged to use government money, for infrastructure projects,��� he said.
Mr Ahluwalia emphasised the need for inclusiveness in a growing economy. He stressed the need for modernising agriculture, which still provides employment to over two-thirds of the working population.
According to Mr Ahluwalia: ���We have to look beyond foodgrain production. We need to look at food processing and agro-processing.��� This move, he felt, would encourage significant private investment. He also said that there would be an increase in spending, on education and healthcare, as India moves towards becoming a knowledge economy.
���According to the common minimum programme, the country can absorb three times the current FDI, it is getting,��� he said. Mr Ahluwalia said the government is considering a review of ceilings for FDI in certain sectors. He said that modernising agriculture was a high priority area and the government was looking at private sector participation in farming.
���While the government played a key role in taking the country to a food surplus stage, private participation would be necessary, to link farmers to new market realities,��� he said.
Prime Minister Manmohan Singh on Saturday, said the country could hope to reach 9-10% growth, basing this goal on high savings and investment rates in India. The PM had said that the savings rate is now over 29% of GDP and investment rate at 31% of GDP.
The key drivers of economic growth, according to Mr Ahluwalia, are a business-friendly economy, higher flow of FDI and surge in private sector confidence. Mr Ahluwalia was speaking at the 16th Asian Corporate Conference in Mumbai. Mr Ahluwalia admitted that there were concerns about possible hindrances for foreign investors and joint ventures such as Press Note 1.
However, he allayed these apprehensions, saying that foreign companies could enter into contractual agreements that did not bind them by regulations. He said the quality and availability of infrastructure could be a potential roadblock for economic development. ���We are aware of a huge gap between India and East Asia in infrastructure facilities. There needs to be a policy framework, whereby private companies would be encouraged to use government money, for infrastructure projects,��� he said.
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While Mr Ahluwalia welcomed private sector as well as foreign investment in infrastructure, particularly in airports, roads and even railway containers, he added that some sections of infrastructure could only be handled by the public sector. Mr Ahluwalia emphasised the need for inclusiveness in a growing economy. He stressed the need for modernising agriculture, which still provides employment to over two-thirds of the working population.
According to Mr Ahluwalia: ���We have to look beyond foodgrain production. We need to look at food processing and agro-processing.��� This move, he felt, would encourage significant private investment. He also said that there would be an increase in spending, on education and healthcare, as India moves towards becoming a knowledge economy.
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