The Hindu Business Line : Chidambaram says no need to fear capital

The Union Finance Minister, Mr P. Chidambaram, and the West Bengal Chief Minister, Mr Buddhadeb Bhattacharjee, at the inaugural ceremony of the Calcutta Leather Complex in the outskirts of Kolkata on Saturday. — A. Roy Chowdhury

Kolkata , July 30

THE Union Finance Minister, Mr P. Chidambaram, on Saturday made a veiled attempt to bridge the differences with the Left on FDI issues. He quoted Karl Marx with the objective of strengthening the argument to raise investment in the banking and insurance sectors.

Mr Chidambaram said, "In 1853, Karl Marx had pointed out that, irrespective of having abundant natural resources, India was subject to widespread destitution due to lack of infrastructure. By infrastructure, Marx meant physical infrastructure like roads, ports. In today's context he would have talked about the lack of banking and insurance services, the need to improve customs procedures, foreign exchange rules, and so on."

The Finance Minister was here in connection with the inauguration of the 1,100-acre Calcutta Leather Complex, the first BOT project implemented in the State. The complex is the largest of its kind in Asia. The core project required an investment of Rs 350 crore and the total cost, including peripheral infrastructural development, was close to Rs 600 crore.

Looking for a recipe to remove bottlenecks and improve growth rate, the Minister focussed on the need for capital, including foreign capital.

"There is no need to fear capital. The method of capital formation has undergone a sea change. With the emergence of institutional capital, it is no longer necessary to regard someone having capital as a capitalist."

Mr Chidambaram said as more and more Indian companies were acquiring units abroad, the popular perception about MNCs should change.

He said it was apparent that India had little choice today but open its doors to foreign capital to ensure a higher rate of investment.

"We should open our doors to foreign investment and in course of time you will find that it is a two-way traffic."

Referring to West Bengal, which has been governed by the Left Front for 28 years, he said the State Government had taken a lead role in attracting foreign assistance in social sectors such as education, healthcare and communication.

"I now want West Bengal to participate in the resurgence of the Indian industry," Mr Chidambaram said.

In the all-India context, he said the manufacturing sector had registered a "very high" growth rate during April-June.

"The last year was very good for the manufacturing sector. This year, so far, it has been even better."

Referring to the growth in investment, Mr Chidambaram said the savings rate, which touched an all-time high in 2003-04, was expected to have improved during last year.

"I find evidence of that from the off-take of bank credit, the number of green-field projects and the projects inaugurated,'' he said.

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