The Hindu : Business : FDI policy undergoes finetuning

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Saturday, Aug 18, 2007
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FDI policy undergoes finetuning

Staff Reporter

It will be aimed at job generation; first quarter equity inflows at $4.9 b

‘Inefficiency if any, will be ironed out’
New areas of investment planned

NEW DELHI: Informing that foreign direct investment (FDI) equity inflows in India have witnessed a steep hike in the first quarter of the current financial year, Union Commerce and Industry Minister Kamal Nath on Friday said the FDI policy was undergoing the “streamlining process” and would be ready in the next two to three weeks.

“India’s FDI policy was the most liberal in the world. After gaining experience in matters relating to FDI inflows where certain anomalies and shortcomings were found, the time had come to iron out these inefficiencies (in the policy), besides incorporating new areas of investments in it. The new FDI policy would continue to remain a major driving force in employment generation,” the Minister said.

Giving details about the FDI inflows, Mr. Kamal Nath said: “During the first quarter of 2007-08, the FDI inflows have been $4.9 billion as against $1.7 billion received during the corresponding quarter of 2006-07, registering a growth of more than 185 per cent. While the first six months of the current calendar year (January-June 2007) have also seen FDI inflows worth $11.4 billion as against $3.6 billion received during the same period in 2006, clocking an impressive growth of 218 per cent.”

The Minister said all these FDI inflows were “first mile investment” which means that the companies would further increase their investments in the months and years to come. Besides Delhi and Mumbai, Bangalore, Chennai and Hyderabad were the other regions that had received the maximum FDI inflows. “These five regions constitute two-thirds of the total inflows received,” he added. Mr. Kamal Nath also informed that during 2006-07, the FDI equity inflows remained at $15.7-billion as compared to $5.5 billion received during 2005-06, a growth of 185 per cent as compared to the previous year.

“This is also the first time that FDI equity inflows into India have crossed the $10-billion mark. If reinvested earnings and other capital inflows are also included, the total inflows in 2006-07 add up to $ 9.5 billion compared to $7.7 billion during the same period last year,” he added.

Quoting the “Quick Estimates of Industrial Production” released by the Central Statistical Organisation, Mr. Kamal Nath said the industrial production registered a double-digit growth of 11 per cent in the first quarter of the current fiscal.

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