Ma­yaram bats for FDI route to at­tain 8 pc GDP growth

The Political and Business Daily - - FRONT PAGE - PBD BUREAU NEW DELHI, JUNE 24

FI­NANCE Sec­re­tary A rv ind Ma­yaram on Tues­day said the na­tion would pre­fer the for­eign di­rect in­vest­ment (FDI) route to for­eign in­sti­tu­tional in­vest­ment (FII) in­flows if over­seas re­sources need to be gen­er­ated to en­cour­age econ­omy at­tain its po­ten­tial-level ex­pan­sion be­cause the growth had been trend­ing be­low 5 per cent for the two years in a row.

"I be­lieve our po­ten­tial growth rate is 8 per cent. And to get there, we need to de­velop re­sources. And that which we can­not gen­er­ate do­mes­ti­cally must come from out­side and if it comes from out­side then we pre­fer it in the form of FDI rather than FII," Ma­yaram said at an event here.

The gross do­mes­tic prod­uct (GDP) ex­panded 4.5 per cent in 2012-13, the slow­est pace in the past decade, and at 4.7 per cent dur­ing the last fi­nan­cial year.

The Re­serve Bank of In­dia this month re­tained its GDP growth es­ti­mate of 5 to 6 per cent for the cur­rent fi­nan­cial year. For­eign in­vest­ment is con­sid­ered cru­cial for In­dia, which needs an es­ti­mated $1 tril­lion in the five-year pe­riod end­ing March 2017 to facelift in­fra­struc­ture such as ports, air­ports and high­ways to boost growth. A de­cline in for­eign in­vest­ment could af­fect the coun­try's bal­ance of pay­ments and the ru­pee.

Over­all for­eign in­flows into the coun­try grew 8 pc to $24.29 bn in the pre­vi­ous fis­cal from $22.42 bn in 2012-13. To fur­ther at­tract for­eign in­flows, the govern­ment plans to re­lax the FDI pol­icy in sec­tors such as de­fence, rail­ways and con­struc­tion ac­tiv­i­ties.

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