Finance Minister P Chidambaram today said there was a need to periodically re-examine the country's foreign direct investment policy for attracting higher inflows and advocated that Indian banks and educational institutions be exposed to world-class competition. | |
| In his address at the India Economic Summit 2005, the finance minister stressed greater corporate participation in pre-tilling and post-harvest activities in the agriculture sector. |
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| "The relationship between the tiller and land is sacred in India and I promise that it will not be broken... But the corporate sector must be allowed in post-harvest management, grading, sorting, packing, transportation, building supply chains and then taking products to the markets," he said. |
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| Asked about opening up retail trading to foreign investment, Chidambaram said, "The debate is going on. I hope that in two-three months, after the public debate, the commerce ministry will be able to arrive at a solution that will satisfy everyone." |
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| He listed out a set of measures for agriculture, industry and service sectors for achieving and sustaining higher growth. Higher FDI inflows and further opening up are crucial for the economy to grow faster and utilise the large talent pool of young Indians. |
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| "The fact that we attract only a fraction of China's FDI has inhibited the use of the young population. We need to re-examine positions constantly," he said. At the same time, the government will continue to focus on health and education. "Services have remained largely outside the fold of the government. The government should not be involved with services except health and education." |
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| The government was aware of the infrastructure bottlenecks and had taken steps like the establishment of a special purpose vehicle and viability gap funding to take care of financing problems, he said. The ability of Indian banks to raise $11-12 billion tier I capital over the next decade will help project finance activity. |
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| He said the government was committed to achieving higher economic growth rates and the gross domestic product could grow by up to 8 per cent. |
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| "With coalition partners we have achieved 7 per cent growth. The coalition partners are also committed to higher growth. We are absolutely confident that with the coalition partners we can achieve over 7 per cent growth or even 8 per cent," Chidambaram told reporters on the sidelines of the summit. |
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| The minister said Indian industry should spend more on research and development as innovation was going to decide the leaders in a globalised world. |
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| The government was working on creation of a large irrigation system and revamping the existing facilities to reduce the dependence of the agriculture sector on monsoons. The measures would help the agriculture sector grow by 3.5-4 per cent annually or by even over 4 per cent. |
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| 'Take uniform stand at WTO'
United Nations Conference on Trade and Development (UNCTAD) Secretary General Supachai Panitchpakdi has called on India to have a focused approach towards agricultural negotiations during the Doha Round of talks underway at the World Trade Organisation. He also urged India to take a leadership role at the WTO ministerial meeting in Hong Kong next month. "India currently has an ambivalent stand towards agricultural negotiations in the WTO talks and this has to change for the benefit of the country's agricultural sector," Panitchpakdi, a former WTO director general, said at the India Economic Summit 2005. |
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