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FDI may fall short of target: survey

NEW DELHI: Global economic slowdown and spiralling inflation caused by increasing oil prices may adversely impact realisation of the foreign direct investment (FDI) target of $35 billion in the current fiscal.

This is the realistic assessment of FDI inflows by of 400 CEOs who felt that the FDI target is likely to fall short by $7-8 billion. They were taking part in a survey conducted by Associated Chambers of Commerce and Industry of India (Assocham).

Adverse sentiment in the stock markets, bottlenecks on infrastructure investments, government’s inability to sign nuclear deal are some of other reasons due to which the FDI target may fall short, the survey said. The chamber has asked the government to take sufficient measures to mount pressure from various bilateral and multilateral agencies on oil producing countries to increase oil production.

In fact, recently Finance Minister P. Chidambaram has appealed the oil producing countries to increase its supply to control prices. He had advocated for a price band mechanism for crude oil for producers and consumers to find a common ground.

“The year 2008-09 has begun with difficult time in which inflationary pressures mounted beyond manageable limits, the adverse impact of which on industry has been substantial in the sense that the yearly profitability of domestic industry would suffer a beating to an extent of 15-20 per cent,” Assocham President Sajjan Jindal said.

The government had set a target of $30 billion in the last fiscal, but it received about $25 billion FDIs.

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