Mumbai:
India is now open for business, deputy chairman of the
Planning Commission Montek Singh Ahluwalia told delegates
from 23 countries including a 200-strong team from
China at the Asia Society Conference in Mumbai
on Sunday. He said that foreign direct investment (FDI)
was looking up in India compared to earlier, and with
the government's continued efforts to improve the investment
climate, India could expect a further increase in FDI,
private investment and globalisation of Indian industry,
especially in the infrastructure sector. Stressing the
need for good quality infrastructure, he said there was
a large gap between the quality of infrastructure available
in East Asia and India.
Ahluwalia said the economy had done well for the past
three years and consequently, the Indian people's perceptions
about globalisation were rapidly changing. "That
has translated into a political consensus that this is
the right thing to do," he said, describing India
as the second-fastest growing economy in the developing
world.
This year, the estimated growth rate is likely to be around
8 per cent while the average growth rate in the last three
years has been just a little below 8 per cent, Ahluwalia
said. He pointed out that enough structural changes had
already taken place, and the Indian economy could now
aim for a consistent annual growth rate of more than 8
per cent. The Planning Commission, he said, was presently
working on setting a feasible target of 8 per cent growth.
"But the prime minister has said that is not good
enough," Alhuwalia told the gathering, "and
we find is that up to 9 per cent growth is feasible in
the medium term." He cautioned, however, that it
was critical that growth should be inclusive. While the
rest of the economy has surged, agriculture is lagging
and deserves a very high level of priority. "This
is crucial for creating an environment where growth will
spread to the rural areas," he said.
He said the inclusive approach should extend even to infrastructure.
At one end was rural infrastructure agriculture,
telecom, water, health and education and at the
other end was urban infrastructure - state-of-the-art
telecommunication systems, airports, ports, roads, modernisation
of railways, etc.
He
admitted that there were problems in some areas, like
power, where it has not been easy to create an environment
for private investment to surge ahead. But the investment
needed for India's infrastructure was huge; there were
areas where only the public sector could provide the investment,
and areas where the private sector was capable of contributing,
like airports, roads, telecommunications, power and the
recent suggestion of bringing private competition into
the railways.
"It
can't be all done by the private sector; the government
will have to play a very big role," Alhuwalia stated,
calling for a policy framework
where government money and initiative can leverage the
biggest possible response from private investment to enter
the infrastructure sector.
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