NEW DELHI: Total FDI in the first four months of the current fiscal touched only $529 million, down from $1.22 billion logged in the April-July period of previous year, said Ashok Lahiri, chief economic adviser to the finance ministry. "I can't give you any particular reason for this. There is a lag with which foreign direct investment comes. We want to streamline foreign direct investment and many steps have been taken towards this," Lahiri said at a press conference here. "If you ask me if the government is complacent about (attracting) foreign direct investment, the answer is no. Are we losing our sleep over the $529 million figure? The answer is not yet." Lahiri said the Iraq war had an "initial impact" on the foreign investment inflows in the country but sentiment improved following quick resolution of the conflict. "Initially, the sentiment was affected all over the world." The official said a sharply higher economic growth in 2003-04 on normal monsoon rains in all parts of the country and a seemingly never-ending rally in stock markets would bring in large-scale foreign investments in months ahead. The prospects of sharply higher economic growth in the current fiscal year boosted by normal monsoon rains across the country have enthused share market investors in a big way in recent months. The Reserve Bank of India, the country's central bank, said Wednesday the earlier economic growth projection should now be enhanced significantly in light of the expected strong agricultural recovery. The RBI had in April projected a six percent growth for 2003-04. India's agriculture-reliant economy grew by a moderate 4.2 percent during 2002-03 on a sharp dip in agriculture output. The benchmark stock market index has also gained as much as 50 percent since touching a six-month low on April 25. "The feel good factor is there. The good news about the monsoon and stock market should translate into a pick up in foreign direct investment. I think you will see action soon. India is an attractive investment destination," said Lahiri. He said FDI in July had already gone up to $180 million from $154 million in the same month last year. "I think the trend will continue in the months ahead." In the previous three months of 2003-04, foreign investments were $349 million, sharply lower from $1.1 billion in the corresponding period of 2002-03. On factors that were putting up roadblocks in attracting large-scale foreign investment, he said: "The investment climate has to be improved and constraints on social and physical infrastructure fronts have to be removed." In 2001-02, total foreign direct investment inflows in India touched $6.1 billion, up from $4.07 billion logged in 2000-01. China, in comparison, attracts over $50 billion in foreign investments annually.
Source: IANS