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Govt to bring out liberalized FDI policy
By siliconindia staff writer
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Friday, 04 June 2004, 19:30 IST
NEW DELHI: The government is likely to come out with a liberalised FDI policy in a bid to make foreign investment an engine of growth and create large-scale employment.
"I would look into the policies and programmes (FDI) to give thrust to exports and manufacturing which would lead to greater job creation," Commerce and Industry Minister Kamal Nath said today.
Any area where FDI leads to more investment and generates employment will be looked into and the approach of the government in those areas will be to have a liberalized FDI regime.
Criticizing the NDA government's policy on FDI, he said during the last five years, FDI has come in only as a displacement of Indian capital.
This did not create any economic activity or generate employment, he said adding, "My perception is very different. FDI should help growth. Liberal FDI policy should increase economic activity and generate employment".
Citing an example, he said 50 per cent of FDI flow in China was in export-oriented and employment-generating industries. Average annual FDI flow in China was over $50 billion and exports accounted for nearly 40 per cent of the GDP.
The Minister declined to divulge details of the sectors where FDI would be further liberalized but indications are that small-scale sector could be one area where the present cap of 24 per cent could be reviewed.