Financial Daily from THE HINDU group of publications
Friday, Nov 01, 2002
Industry & Economy
Foreign Direct Investment
Amcham offers partnership to make India an attractive FDI destination
NEW DELHI, Oct. 31
THE American Chamber of Commerce in India (Amcham), the chamber representing the largest group of foreign investors from any one country in India, has come to the rescue of the Centre and the States. It has offered its partnership to the Centre and State Governments for any initiative that would make India an attractive destination for foreign direct investment (FDI).
In a note to the Government on the Tenth Plan, which has proposed an outlay of Rs 1,59,23,000 crore ($325 billion), Amcham has said that it would be willing to take the initiative to promote India to the prospective American investors. Members of the chamber include about 100 companies, which are on the list of Fortune 500 with a majority of $15 billion FDI from the US.
Amcham has said that it fully supported the Centre's Plan targets, including a GDP growth of eight per cent, disinvestments worth Rs 78,000 crore and actual FDI inflows of about $7.5 billion annually, and would do its best to ensure that the right messages are conveyed to all prospective US investors.
The chamber also stood committed to support any measure that would help accelerate the growth of FDI - thus supporting the growth of GDP - and hoped that the Government would go ahead with the process of reforms. These include the so-called "tough decisions" like disinvestment and privatisation, with the political parties realising the futility of fractured economic policies.
In a "realistic" assessment of the growth targets, Amcham has said that it was now absolutely clear to all quarters that the domestic saving potential is not sufficient to justify investments which would push the GDP growth to eight per cent, provide additional 10 million new jobs each year and reduce the poverty level by five per cent during the Plan period.
The success of the Plan, therefore, it has argued, would depend on the country's ability to attract the minimum level of FDI envisaged in the Plan document. However, given the country's track record in attracting about $3 billion annually, a target of $7.5 billion appeared far-fetched, it said.
Thus, if the FDI target is to be achieved, the Government, Amcham said, would need to show its determination and commitment to overcome the political and ideological differences not only with the opposition parties but more so within the political constituents of the NDA coalition. Besides, the largest party in the coalition, the BJP, will have to come to terms and support the Government's initiative if the poverty level is sincerely sought to be reduced and new employment opportunities provided.
The chamber has expressed the hope that the legacy of the past few years whereby most of the reform processes have slowed down would not be allowed to continue, at least for the sake of the growing population of the country and the general well being and prosperity of the people.
In the regard, the chamber, it may be recalled, had a meeting with Mr N.K. Singh, Member, Planning Commission, wherein it sought early acceptance by the Government of his report on FDI which, among other things, had recommended removal and/or increase in ceiling limits on foreign equity in several sectors.
This apart, the chamber had also sought enactment of six major legislations, including those on fiscal responsibility, privatisation of banks, coal denationalisation and convergence.
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