FM Clears Govt's Stance On FDI, Calls India A Safe Haven For Global Capital (30-Jan-2012)
In an effort to attract US investors, Finance Minister, Pranab Mukherjee while speaking to top business leaders, including those from Fortune 500 firms, at the Chicago Council of Global Affairs reiterated his government's commitment to bring about Foreign Direct Investment (FDI) in multi brand retail. He said that India had further liberalised FDI in single brand retail, and was in the process of building up consensus among the various stakeholders for FDI in multi brand retail.
India has taken number of steps to simplify the FDI regime to make it easily comprehensible to foreign investors. To make the FDI policy more user-friendly, all prior regulations and guidelines have been consolidated into a comprehensive document, which is reviewed every 6 months. FDI flows in India, which had considerably declined in 2010-11, had now bounced back in current fiscal year.
Emphasizing the need to sustain and strengthen the domestic growth, finance minister said that India was concentrating on accelerating the pace of the investment in infrastructure in its 12th Five Year Plan. India needed to invest an additional $1 trillion to sustain its current levels of growth and to equalize its benefits over the Plan period. For this, it was looking for additional investments from the private sector. The share of private and public-private partnership (PPP) investments in total investment during the 12th Plan (2012-17) was targeted to increase to 50% from the estimated 30% in the 11th Plan (2007-12).
The PPP route for investment in Indian infrastructure represented a commercially attractive opportunity for foreign investors. He further stated that the government had taken various measures to encourage and facilitate foreign investment in infrastructure. By adding further he said, standardized and sophisticated contract documentation is in place and finally, India has now established unique and innovative financing instruments such as a scheme to support Viability Gap Funding (VGF) for PPP projects and special purpose vehicles (SPVs) for giving long tenor loans to PPP projects.
He also observed that India's growth fundamentals were strong and they looked more attractive in a world challenged by problems of confidence and lack of growth. India's robust performance in difficult times made it a safe haven that global capital was looking for. India presented an opportunity at this moment that could not be ignored.
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