Mayaram bats for FDI route to attain 8 pc GDP growth
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.