(a) Whether the Government`s attention have been drawn to the news-item captioned `India not fit for foreign investment`
appearing in the Indian Express dated 31.7.2003:
(b) if so, the facts of the matter reported therein; and
(c) the steps the Government have taken to eradicate the maladies pointed out in the report?
MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI ANANDRAO V. ADSUL)
(a)&(b): Yes Sir. The news-item appeared in `Indian Express`
dated July 31, 2003 reported the findings of World Bank study
prepared in association with Confederation of Indian Industry.
The study observed that despite India being a cost effective
location for several industries, transportation bottlenecks
and infrastructure costs often wipe out India`s advantage for
foreign direct investment compared to many other emerging market
economies.
(c) Government has taken several steps to promote domestic and
foreign investment which amongst others include liberalization of
policy in trade, industry, foreign direct investment infrastructure
and financial sector, rationalization and reduction of both direct
and indirect taxes, reduction of interest rates, tax holidays for
investment in infrastructure and backward areas, combined with
sound-macro economic policies so as to stimulate economic growth
with stability in prices and exchange rates.
The Budget 2003-04 proposed public private partnership for
infrastructure development. The measures are expected to remove
the infrastructure bottlenecks.
As a result of these measures , the foreign direct inflows have
by and large registered a consistent growth since 1991. FDI
inflows have increased from US $ 2.34 billion in 2000-01 to
US $ 3.9 billion in 2001-02.