'Sensex fall due to sale by FIIs resulting from global meltdown'

New Delhi, May 31: Finance Minister P Chidambaram today attributed the steep fall in the SENSEX to selling by FII's resulting from a meltdown in global markets, but said India continues to get substantial amount of foreign capital.

''Global markets are down and it is partly reflected on India markets also,'' Mr Chidambaram told reporters here.

The Finance Minister, however, discounted the view that consumer demand would be affected by the substantial fall of the stock markets.

''Our consumer demand is very huge and our growth is driven largely by domestic demand,'' he said.

To a question on net sale by FIIs during the last 11 days, Mr Chidambaram said overall the flow of foreign capital, including FDI, was positive.

The BSE Sensex closed nearly 388 points lower after going down by 600 points by noon.

''My information is that lot of foreign capital is moving into India and that includes FIIs .We will continue to attract FIIs. We also need to attract FDI,'' Mr Chidambaram said.

The Finance Minister said the country needs more reforms and foreign investment to sustain economic growth.

''Foreign capital goes to countries where there are structural reforms, legal reforms, and administrative reforms,'' he said.

Mr Chidambaram said last year FDI inflow into India had surpasased that of the previous year and this year too, the country is poised to attract more FDI due to many projects in the area of infrastructure.

The Finance Minister made a forceful case for eliminating hurdles in the way of attracting larger doses of FDI.

UNI

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