PC vows to further ease FDI policy to attract $
1 Aug 2013 10:48 PM GMT
Faced with sliding rupee, Finance Minister P Chidambaram on Wednesday said that the government will further liberalise the country’s foreign direct investment (FDI) policy and encourage public sector undertakings to raise funds from overseas markets. Addressing media on completion of one year as Finance Minister, he exuded confidence that economy would record a growth rate of 5.5 to 6 per cent in the
current fiscal, up from 5 per cent a year ago.
Chidambaram, who took charge of the ministry on 1 August last year, said the government was also looking at raising import duty on non-essential luxury items and promoting exports to contain current account deficit (CAD), which had soared to a high of 4.8 per cent of the GDP last fiscal.
'We are looking at some compression in non-oil and non-gold import to curb demand for non-essential luxury items,' he said. The other steps being considered by the government to deal with the CAD include relaxing the External Commercial Borrowing (ECB) norms, attracting investments from sovereign wealth and pension funds and non-resident Indian (NRI) deposits.
Replying to questions on rupee, the minister said though he did not have fixed target in mind but he would endeavour to check volatility and end speculative trades on the domestic currency.
On the possibility of a sovereign bond issue to raise forex, he said, 'that is an option on the table but I will not rush into any decision'. The government recently relaxed the FDI policy raising the caps in several sectors and permitting foreign investment in many others under the automatic route.
Elaborating on compression on imports, Chidambaram said that officials were preparing a list of non-essential goods with a view to limit their inward shipments. Specifically mentioning coal and electronic hardware, he said, 'Electronic hardware can be manufactured in states like Rajasthan and Kerala.'
On giving further extension to RBI governor D Subbarao, Chidambaram said that he had expressed his desire to move on and the government has started looking for new central bank head. The term of Subbarao as RBI Governor ends on 4 September.
As regards the economy, Chidambaram said, 'I am confident that we will take the Indian economy one rung higher in 2013-14. We are looking forward to a growth rate between 5.5-6 per cent and we will take all measures to achieve that goal'. The minister, however, underlined the need for reviving investor sentiment and emphasised that 'industry must play its part'.
Industrial houses, he added, 'appear to be confident when they decide to invest abroad, the same confidence must be exhibited in order to invest in India. The price of credit is indeed high, but it is not so dauntingly high that it should hold back investment'.
current fiscal, up from 5 per cent a year ago.
Chidambaram, who took charge of the ministry on 1 August last year, said the government was also looking at raising import duty on non-essential luxury items and promoting exports to contain current account deficit (CAD), which had soared to a high of 4.8 per cent of the GDP last fiscal.
'We are looking at some compression in non-oil and non-gold import to curb demand for non-essential luxury items,' he said. The other steps being considered by the government to deal with the CAD include relaxing the External Commercial Borrowing (ECB) norms, attracting investments from sovereign wealth and pension funds and non-resident Indian (NRI) deposits.
Replying to questions on rupee, the minister said though he did not have fixed target in mind but he would endeavour to check volatility and end speculative trades on the domestic currency.
On the possibility of a sovereign bond issue to raise forex, he said, 'that is an option on the table but I will not rush into any decision'. The government recently relaxed the FDI policy raising the caps in several sectors and permitting foreign investment in many others under the automatic route.
Elaborating on compression on imports, Chidambaram said that officials were preparing a list of non-essential goods with a view to limit their inward shipments. Specifically mentioning coal and electronic hardware, he said, 'Electronic hardware can be manufactured in states like Rajasthan and Kerala.'
On giving further extension to RBI governor D Subbarao, Chidambaram said that he had expressed his desire to move on and the government has started looking for new central bank head. The term of Subbarao as RBI Governor ends on 4 September.
As regards the economy, Chidambaram said, 'I am confident that we will take the Indian economy one rung higher in 2013-14. We are looking forward to a growth rate between 5.5-6 per cent and we will take all measures to achieve that goal'. The minister, however, underlined the need for reviving investor sentiment and emphasised that 'industry must play its part'.
Industrial houses, he added, 'appear to be confident when they decide to invest abroad, the same confidence must be exhibited in order to invest in India. The price of credit is indeed high, but it is not so dauntingly high that it should hold back investment'.
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