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The editorial, `Landing rights for FDI' (Business Line, September 17) made some valid points. Though the N. K. Singh committee has made several recommendations for a boost in FDI, the issue needs an in-depth examination.

A point that cannot be overlooked is that only a favourable ambience can attract foreign investment since any investor, domestic or foreign, will be interested in a fair return on his investment and a hassle-free working atmosphere. While FDI in all sectors is welcome, it will be most desirable to have it in hi-tech areas and those with employment potential.

Care should be taken while fixing the cap on FDI in various sectors, not to weaken domestic industries since foreign investors will have the advantage of superior technology and resources, making it practically impossible for domestic units to compete. This calls for a sector-wise examination to fix the limit.

Then, there are the sensitive areas like the media and security-related sectors wherein careful thought should be given before allowing entry of foreign players.

One point to be considered is whether domestic savings have been put to good use. Even a favourable Credit Policy has not helped spur sufficient demands for funds by domestic quarters.

This situation has caused an unfavourable interest regime for investors in banks, slowing down savings with its inevitable consequences.

The question of improving domestic business and trade availing loans from banks in a significant way cannot be lost sight of.

The Central government should go into the question of poor demand for funds from banks in a serious way and initiate steps for better utilisation of the funds.

T. R. Anandan

Coimbatore

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