Foreign investment, key component of India's development startegy:FM
New Delhi, Mar 3 (UNI) Finance Minister P Chidambaram today beckoned the US business community to bring in their 'money, technology, managerial and management skills" for investing in India, saying that the government would want four per cent of the GDP to come from foreign investment and has a conducive policy environment in place to ensure high sustainable profits.
"We want your money. Those who have the money also have the technology. The world class and size American companies also have good governance, good managerial and management practices. If they come to India, they will impart this to us," Mr Chidambaram said inaugurating the "Indo- US Economic Cooperation' conference.
The event has been organsied by CII- US India Business Council, and is being attended by American CEOs accompanying US President George Bush on a visit to the country.
"We feel foreign investment will be extremly beneficial to India," Mr Chidambaram quipped and explained the logic as to why this was so.
The Finance Minister said growth was a function of the quantum of investment and the efficiency of its use. India's savings rate is 29 per cent of the GDP and investment rate of 30 per cent of the GDP.
This enables a growth rate of 7-8 per cent per annum.
For India to step up this growth rate to ten per cent, domestic savings need to be supplemented with foreign savings and investment.
Besides, private savings have an efficiency level higher than that of the government.
Mr Chidmabaram said trade and investment are a two-way affair and if American companies invest in India then this will open the US markets to Indian goods.
And in the ultimate analysis it will open the doors for Indian companies to take over American companies in the United States as also set up more start up projects, Mr CHidambaram said referring to the growing trend of outward flow of FDI from India.
The Finance Minister said India has achieved an eight per cent growth from where it will be possible to repeat this on a sustained basis.
"There are all kinds of opportunities for investing in India. The country wants US investors," Mr Chidambaram said but explained the constraints of moving faster on reforms resulting from the nature of government--a democrstic coalition.
"Just be patient," Mr Chidambaram remarked and said he understood the logic of foreign business seeking a hike in FDI limits in the Financial sector, particularly investment.
"The 26 per cent cap on Insurance was not an entry barrier but possibly a barrier for expansion of business," Mr Chidambaram said.
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