FDI inflows to double by 2010: Montek Singh

New Delhi, July 1: Planning Commission Deputy Chairman Montek Singh Ahluwalia today said the government expects the flow of Foreign Direct Investment (FDI) to double by the middle of Eleventh Plan and indicated that the government was evolving a more flexible labour policy in consultation with different political parties.

Dr Ahluwalia said FDI flows, which at present stood at ten billion dollars per annum, were likely to double by mid of Eleventh Plan (2007-11) as a result of the conducive policy framework and the country's growing strature in the comity of nations. With this level of injection of FDI, the curent flip of infrastructure development would attain vigour, he said.

The Plan Panel Deputy Chief made these remarks while inaugurating a 'Consortium Summit' here, sponsored by the ASSOCHAM, MIT India, ICICI and other organisations.

On labour Laws, Dr Ahluwalia said flexibility was essential but felt that given the current political and social realities, a policy on hire and fire was neither practical nor desirable.

He, however, said an influential section of the society was keen to introduce a framework of hire and fire.

Dr Ahluwalia said the Union Labour Ministry was working out a policy where there was flexiblility of labour laws, but this would be done by evolving a consensus with all constituents of the UPA government. The aim was to ensure that there was no political disharmony.

Dr Ahluwalia said the Approach document to the Eleventh Plan (2007-11) aims at accelerating the GDP Growth rate to 9.5 per cent by the middle of the Plan period to ensure that an average GDP growth rate of 8.5 per cent is achieved by the end of next plan period.

The government expects the Tenth Plan GDP growth rate to average around 7.5 pe cent, he said.

''So far investments from overseas institutions in the stock market through listed companies was estimated at 10 billion dollars and with the increased focus of UPA government for the development of infrastructure sectors like roads, ports, airports, and communications as well as other reform measures these investments would double in the next few years,'' he said.

Dr Ahluwalia, however, regretted that power sector reforms had not taken off. The power sector which ought to have attracted a large amount of private investment has failed to do so and its aggregate technical losses increased to 38 per cent, which should have been about six per cent.

The government, therefore, would do its best to accelerate public-private investment in the power sector during the Eleventh Plan period so that it becomes an engine which fuels higher growth, he noted.

The government, according to the Deputy Chairman of the Planning Commission, would make the regulatory mechanisms more effective and user friendly so that public- private investment that flow into the infrastructure sectors in the years to come is properly and gainfully utilised. The regulatory systems would enable developing leakages in the value chain processes of the system.

Among the leading participants in Summit were Delhi Chief Minister Sheila Dixit, Power Secretary R V Shahi, Industrialist Adi Godrej, and Planning Commission meber Kirit Parikh.

UNI