Govt. strategy to boost FDI inflow

By Our Special Correspondent

NEW DELHI, JUNE 21. The Union Government has decided to reach out to foreign companies interested in investing in the country in order to maintain the momentum of foreign investment inflow. The key element in this strategy would be contacting all companies that have received approval from the Foreign Investment Promotion Board (FIPB) in order to ascertain the progress in actualising the project and whether the applicant is encountering any obstacle or needed any help.

This contact would initially be with the foreign company's staff deputed to India for start-up purposes and initial groundwork. The Secretariat for Industrial Approvals (SIA), which has been entrusted with the task, has been asked to upgrade this contact even to board levels. The intention is to make the companies aware that the Central Government is fully committed to ensuring that the FDI inflows are smooth and implementation of projects quick, observed an official release here today.

A greater role is also envisaged for Indian embassies which were recently asked to accept FDI applications as well as monitor FDI cases emanating from their regions on behalf of the Foreign Investment Implementation Authority (FIIA). The Commerce Minister, Mr. Murasoli Maran, has directed that follow-up action on reports sent by embassies should be expeditiously taken.

Mr. Maran said the SIA had been asked to adopt a sector-wise approach in pursuing FDI cases for more effective coordination with administrative ministries. In addition, the present mechanism of reviewing mega projects and holding meetings on a region-wise basis and meetings with investors from specific countries such as the U.S., Germany, Japan, the U.K. and France would continue with greater frequency.

``We want closer and more sustained interaction with investors on one hand and with the relevant agencies of the Government and institutions on the other to bring about a much sharper focus on implementation and to supplement the policy changes which have already been put in place. It is expected that India's image as an attractive destination would improve as implementation becomes smoother,'' observed the release.

According to official figures, the actual FDI inflow has increased since 1998 but the percentage of approved FDI being translated into inflow has decreased. For instance, the actual inflow was $4 billion in 1999 and $4.5 billion in 2000. But the percentage of actual inflows had fallen from 59 per cent to 52 per cent.

Although foreign direct investment inflow has been growing, Mr. Maran recently held a series of internal discussions and reviews to frame a strategy for increasing it to higher levels, said the release.

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