Is the FDI target attainable?
Notwithstanding the moderation in growth of the Indian economy, the foreign direct investment (FDI) boom is continuing.
Notwithstanding the moderation in growth of the Indian economy, the foreign direct investment (FDI) boom is continuing. According to the Reserve Bank of India, FDI inflows in the first quarter of the current financial year crossed $10 billion (Rs 43,000 crore).
Subir Gokarn, Chief Economist, Standard & Poor’s Asia Pacific, believes that this figure is achievable given the spurt in investments in the infrastructure and the commodities sectors.
And these investments are largely unaffected by the domestic interest rate cycles and business sentiment.
“New opportunities are certainly being created for private investment, especially as the medium- to long-term story remains persuasive. The risk, however, is of not moving fast enough to create more such avenues for investments,” he says. The focus then, should clearly be on expanding the opportunities by reform rather than on the numbers.
—Shalini S. Dagar
Where does it go?
|
Coupled with inflows of $11.9 billion (Rs 51,170 crore) in the last quarter of 2007-08, the figure for the first six months of 2008 is over $20 billion (Rs 86,000 crore).
At a recent meeting, Ajay Shankar, Secretary, Department of Industrial Policy & Promotion, announced that the government expects FDI inflows this year to cross $40 billion (Rs 1,72,000 crore).
And these investments are largely unaffected by the domestic interest rate cycles and business sentiment.
“New opportunities are certainly being created for private investment, especially as the medium- to long-term story remains persuasive. The risk, however, is of not moving fast enough to create more such avenues for investments,” he says. The focus then, should clearly be on expanding the opportunities by reform rather than on the numbers.
—Shalini S. Dagar
