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‘Your money will be safe in India,’ says PC while beckoning investors

'The macro economic fundamentals and the micro economic fundamentals make India an attractive and safe investment destination,' he said while addressing the second South Asian Diaspora convention.

The government, Chidambaram said, has taken a number of measures to stabilise the economy and give greater confidence to investors. 'India can offer to the investor a variety of investment opportunities. There are government securities and corporate bonds. There are mutual funds and infrastructure development funds. We can offer equity in our public sector enterprises that are under the disinvestment programme.

'There is a clutch of projects in the oil and gas sector that will welcome strategic investors. Shortly, we will offer a public sector ETF that will allow you to buy units backed by underlying equity shares,' he said at the convention attended by over 1000 delegates.

Referring to growth, Chidambaram said India has a potential growth rate of 8 per cent and above and during the 20 year period between 1991-2011, the average growth rate was 7 per cent.

Noting that the key to sustaining high growth rate is investment, the minister said the government will endeavour to contain fiscal deficit to below 3 per cent of the GDP, and safely finance the current account deficit (CAD) and keep inflation under 5 per cent.

Referring to the recent volatility in exchange rate, Chidambaram said it was imperative for a government to insulate the currency from speculative attacks and excessive volatility. 'We believe that the exchange rate of rupee today is a better reflection of its true value and we are confident that both volatility and speculation have been largely contained,' he said, adding the response to the rupee bond of IFC indicated market confidence in the Indian rupee.

As regards investment opportunities, the minister said while the Indian equity market has given a compounded annual growth rate of 15.8 per cent between 2003-2013, the government securities had a return of 7.92 per cent, 8.52 per cent and 8.36 per cent in the last three years. 'I believe that there are few markets in the world which give comparable returns,' he said.

The minister assured the investors that fiscal deficit in the current financial year will be contained at 4.8 per cent of GDP and CAD at below $60 billion.

'For the current year, I have drawn a red line at the original target of 4.8 per cent and I have made it clear that the red line will not be breached under any circumstances,' he said.

The CAD for 2012-13 was $88 billion. 'In the current year we have taken a number of measures — some of them like compressing gold imports have already yielded results — and I am confident that the CAD will be contained at a level well below $60 billion and that it will be fully and safely financed,' he added.
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