The Hindu Business Line : Pvt sector job reservation won't affect FDI inflows

Comparative figures
In 2005-06, there was $4.8 billion FDI inflow in equities and $2.7 billion of reinvested earnings by corporates.
In 2004-05, inflows stood at $5.3 billion, comprising $3.2 billion of equity investment and $2.1 billion of reinvested earnings.

New Delhi , April 19

Foreign direct investment (FDI) during 2005-06 grew by 40 per cent to touch $7.5 billion and would exceed $10 billion during the current fiscal and job reservation in the private sector would not hinder FDI inflows.

This was stated here on Wednesday by the Minister for Commerce and Industry, Mr Kamal Nath, at the annual meeting of the Confederation of Indian Industry. "Job reservations in the private sector would not affect FDI inflows. There would be no impact on FDI flows," Mr Nath said.

The Minister also released a compendium on `India's Foreign Direct Investment Policy' that brings together India's current policy on FDI along with the relevant Press Notes.

Giving details of FDI inflows, Mr Nath said that during 2005-06 there was $4.8 billion FDI inflow in equities and $2.7 billion of reinvested earnings by corporates.

FDI inflows in 2004-05 stood at $5.3 billion, comprising $3.2 billion of equity investment and $2.1 billion of reinvested earnings. About 75 per cent of the FDI is in manufacturing sector, which is a healthy sign for the economy, he said.

Mr Nath said a number of rationalisation measures had been undertaken which include dispensing with the need of multiple approvals from Government and/or regulatory agency that existed in certain sectors, extending the automatic route to more sectors and allowing FDI in new sectors.

Policy liberalisation

"Liberalisation of FDI policy is expected to attract large FDI inflows in the development of infrastructure, technological upgradation of Indian industry though greenfield investment in manufacturing, and in projects having potential for creating employment opportunities," he said. On further opening up retail sector, he said the Government was looking at FDI, which does not displace the existing investment and employment but has an incremental impact on both.

Further, economic liberalisation also depends upon the ongoing talks at the World Trade Organisation, he said.

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