Financial Daily from THE HINDU group of publications
Friday, Jul 12, 2002
Industry & Economy
Foreign Direct Investment
FDI inflows hit record high of $4.06 b: Maran
NEW DELHI, July 11
THE country's performance on foreign direct investment (FDI) has been both "promising and reassuring'' with FDI inflows registering a record high of $4.06 billion (net of ADRs/GDRs) during the fiscal 2001-02.
This was about 65 per cent higher than the FDI inflows obtained during 2000-01 and further this growth was being sustained during the current year as well, the Union Minister of Commerce and Industry, Mr Murasoli Maran, said while chairing the meeting of the Parliamentary Consultative Committee attached to his Ministry here today.
He said FDI inflows continued to post an impressive growth during 2002 too with cumulative inflows during January-May 2002 (net of ADRs/GDRs) estimated at $1.89 billion, as against $1.18 billion received during the similar period of 2001, registering a substantial growth of 60 per cent.
Pointing out that this had been achieved at a time when there had been a steep decline in global FDI inflows, Mr Maran said that "this is highly reassuring as it is a reflection of the investor confidence as also an acknowledgement of the progressive reforms being carried out by the Government''.
Citing the London-based The Economist, he said the magazine in its recent issue observed that "India is reforming more than it often gets credit for. Last year's record inflow of FDI may be an acknowledgement of this''. Interacting with the members of various issues, the Minister concurred with a suggestion mooted by Mr Kapil Sibal that the Government should set off a dialogue with the Opposition parties to evolve a common agenda encompassing key issues such as labour reforms so that the country could achieve faster economic growth through a collective approach.
Members called for bold initiatives on the farm front while underscoring the primacy of agriculture in the economy. They also called for exploration of new markets, notably Africa, and greater involvement of States and agencies in the formulation of trade and economic policies. Mr P.C. Thomas and Mr Master Mathan and others highlighted the difficulties faced by growers due to continued fall in commodity prices including items such as tea and stressed the need to ensure remunerative returns to growers by exploring new export markets for tea, rubber.
Mr Maran responded that the involvement of State Governments in exports had been strengthened with a substantial Tenth Plan provision of as much as Rs 1,725 crore.
Giving an update on the special economic zones, the Minister said the Positra SEZ (Gujarat) had completed financial closure, while Nangunery SEZ (Tamil Nadu) was about to take off with acquisition of land and financial closure. Dronagri (Maharashtra) was in an advanced stage and in Kolkata, the gem and jewellery park at Manikanchan had been given the status of SEZ. In all, 13 SEZs had been set up so far, he said.
Referring to the industrial scenario, Mr Maran informed that there had been an improvement in the production of the six infrastructure industries, which reflected a growth of 5.8 per cent in April-May 2002, against only one per cent in the corresponding months of 2001.
"The growth rate in production is particularly noteworthy for cement (10.1 per cent), petroleum refinery products (8 per cent) and finished steel (6.4 per cent). The Society for Indian Automobile Manufacturers (SIAM) has also reported a quantum jump in May 2002 in the sales of motorcycles by 51 per cent and of commercial vehicles by 44 per cent. These two reflect the improved demand from rural areas and the growing demand for freight movement'', Mr Maran added.
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