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Saturday, Jan 10, 2004

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PM lifts cap on investment abroad — Corporates can undertake overseas farm activities

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The Prime Minister, Mr A.B. Vajpayee, at the Pravasi Bhartiya Divas, in the Capital on Friday. - Kamal Narang

New Delhi , Jan. 9

THE Government's pre-election largesse to the corporate sector continues. After a slew of duty cuts announced by the Finance Ministry on Thursday, the Prime Minister, Mr Atal Bihari Vajpayee, on Friday allowed Indian corporates to make overseas investments up to 100 per cent of their net worth, lifting the current restriction including a ceiling of $100 million. The investment can be made either through a joint venture or a wholly-owned subsidiary.

Further, to encourage Indian corporates to go global in the agriculture sector, the Prime Minister also announced lifting of restrictions on corporates to undertake agriculture activities abroad, whether directly or through an overseas branch.

"This will enable Indian companies to take advantage of global opportunities and also to acquire technological and other skills for adoption in India," Mr Vajpayee said while inaugurating the second Pravasi Bhartiya Divas Conference here.

Expressing his happiness at the economy for achieving near 8 per cent growth target in 2004, he said that India had emerged as a strong economy and had transformed itself from an aid-receiving country to an aid-giving country.

The Prime Minister also said that, "India was on the way to becoming a superpower in information technology. It has emerged as the preferred place for IT-enabled services. Sometimes this is also projected as a loss of jobs to India," he said.

Calling these fears as misplaced, the Prime Minister said, "In today's highly competitive global markets, it is natural for companies and organisations to use technology and internationally available human resources in ways that enhance their efficiency. What India's trained manpower is offering through IT-enabled services is a win-win situation for both India and the sourcing countries."

Touching upon the role of Persons of Indian Origin/NRIs and their contribution to the economies of their adopted countries, Mr Vajpayee pointed out that over Rs 55,000 crore had come from NRIs and Keralites accounted for nearly half of that.

He also announced setting up of a Pravasi Bhartiya Kendra in Delhi with a grant of Rs 25 crore from the Government. The Kendra would strive to develop closer ties between the country and the diaspora.

The Prime Minister also said that NRIs in the Persian Gulf region and South-East Asia would no longer have to pay higher fee for education of their children and would be treated at par with Indian residents.

Speaking on the occasion, the Minister for External Affairs, Mr Yashwant Sinha, said, "On the economic front, India has achieved a growth rate of 8.4 per cent in the second quarter of this fiscal year. Our coffers are bursting with over $100-billion foreign exchange reserves. There are abundant food stocks in our granaries. Inflation is under check. Trade is booming.

"Following the lead of the services sector, India's manufactured goods are penetrating the leading markets of the world."

He also said "appreciation for the quality of India's human resources continues to grow. Business and industrial sectors are brimming with confidence."

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