India needs $460 bn FDI in 10 years

Wednesday, 22 December 2004, 08:00 Hrs
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BANGALORE: India will need $480 billion in foreign direct investment (FDI) over the next 10 years to become a developed nation, Infosys chairman N.R. Narayana Murthy said here Tuesday.

Inaugurating the Standford-India Development Conference 2004 at the Infosys campus, he said though Prime Minister Manmohan Singh had hinted India would need $150 billion to develop infrastructure, the amount may be inadequate to make India economically strong in the coming decade.

"My gut feeling is we should get about $480 billion FDI in the next 10 years if we really aspire to be economically strong," Murthy said in his opening remarks.

To facilitate greater FDI inflow, Murthy said India should step up its exports to the extent the country would be recognised globally as a favourite destination by overseas investors.

"Increased exports will encourage FDI inflows. We need to concentrate on exports to be recognised globally as a country worth investing in for years," he said.

Advocating developmental economics to tackle the problem of poverty, Murthy said there was a need to wean away people from agriculture to increase per capita income.

"With about 660 million people growing only 230 million tonnes of food grains every year, the per capita income will inevitably be lower," he noted.

"If we have to shift a substantial number of these people from agriculture, we have to create matching opportunities in the manufacturing and services sectors.

"Since disposable incomes are low, we have to look at exports. But with exports constituting only 11-12 percent of the national GDP, the government will have to formulate growth-oriented policies to multiply exports."

If India has to attract large inflows of FDI, an investment climate has to be created with a unified approach by all stakeholders, including industry, academia and the political establishment.

"Giving up rhetoric, the economists will have to make the political class create more quality jobs," Murthy said.

"The way to move ahead is to create a compelling environment for our political leaders to take the right decisions, leading to all-round economic growth, more jobs, disposable incomes and wealth creation."

Source: IANS
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