The Hindu : FDIs reach record levels

Online edition of India's National Newspaper
Friday, Jul 12, 2002

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Business

FDIs reach record levels

By Our Special Correspondent

NEW DELHI JULY 11. India has achieved a record level of $4.06 billion of foreign direct investment during 2001-02, which is 65 per cent higher than in the previous year. The inflows during the period from January to May 2002 have also risen by an impressive 60 per cent from $1.18 billion to $1.89 billion.

Disclosing this here today at a meeting of the Parliamentary Consultative Committee attached to his Ministry, the Commerce and Industry Minister, Murasoli Maran, said this substantial growth in foreign direct investment had been achieved at a time when there had been a steep decline in global FDI inflows. "This is highly reassuring as it is a reflection of the investor confidence as also an acknowledgement of the progressive reforms being carried out by the Government,'' he said. Mr. Maran said a committee comprising representatives of the Reserve Bank of India and the Department of Industrial Policy and Promotion (DIPP) would shortly submit a report for adoption of an international reporting and computation system to compute FDI.

The committee had been set up because India's FDI data did not now include reinvested earnings and other direct capital flows that form part of FDI as per the international practices of the International Monetary Fund, he said. In fact a recent study had said that adoption of international standards for computing FDI would raise India's net annual FDI to about $8 billion, roughly 1.7 per cent of India's GDP.

Mr. Maran said the strong performance of FDI was mainly on account of the recent policy initiatives taken by the Government in terms of automatic entry, removal of caps in most sectors and various investment facilitation measures. The Foreign Investment Implementation Authority (FIIA) had also been activated and on an average about 2,000 responses in a year were being given to the investors and potential investors, he said.

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