Emphasis on rural development and agriculture in the latest union budget will not dampen India’s interest in foreign investment, Planning Commission deputy chairman Montek Singh Ahluwalia said.
In a bid to reassure overseas investors, Ahluwalia said on Tuesday that a sizeable chunk of the massive investment required in infrastructure, for instance, will come from the private sector.
In his address at the second annual conference on Indo-US Economic Cooperation organized by the Confederation of Indian Industry (CII) together with the United States-India Business Council, Ahluwalia said that about $350 billion is needed in the next five years to increase India’s investment in infrastructure such as ports, roads and airports to the desired level of around 10% of GDP.
“About $18-$20 billion of these investments will need to come from the private sector every year,” Ahluwalia said. These private investments will include foreign direct investment (FDI), he said.
India hopes to raise investments in infrastructure to maintain the GDP growth rate at 9% or even 10%. Ahluwalia stressed that if the government tries to make growth inclusive, it should “not be taken to mean that existing growth agenda is being diluted.”
American businesses present at the meeting, such as General Electric India and AIG, said that they favoured higher limits for FDI in sectors that are already liberalized while opening up new sectors such as retailing.
Some business representatives, however, were cautious and stressed that foreign investment needs to continue rising even in businesses that are already open to FDI.
“We must not just focus on what sector can not be pried open now, but try and use what is already open in India’s economy to the best possible advantage,” said Rajive Kaul, chairman, Nicco Corporation Ltd.
Department of industrial policy and promotion secretary Ajay Dua said that enough opportunities are available in India for investment by companies from the US.