The Hindu Business Line : Chidambaram stresses on investment in core sector

ALTHOUGH India has made good progress in the financial, manufacturing and external sectors, looking at the future the main concern is infrastructure where "our main goal is to attract large quantities of investment", the Finance Minister, Mr P. Chidambaram, said in his remarks to the India Investment Forum here.

He said that India has very large, almost inexhaustible human resources and blessed with physical resources, "but what we lack is world-class infrastructure."

Mr Chidambaram made his remarks to a high profile gathering of institutional investors at the Investment Forum which was organised by Euromoney Institutional Investor and sponsored by Merril Lynch and the State Bank of India group.

The Forum is said to have had a registered attendance of more than 300 participants who in all account for some $6 trillion in investment funds.

By way of examples the Minister referred to the potential investments in the area of infrastructure in India in such areas as power and telecom. "The figures are mind boggling but India is a very large country...India needs the capacity to absorb large quantities of investment," Mr Chidambaram remarked going on to make the point that the Government for its part will do what has to be done for the realisation of the objectives.

The two-day forum here is seeing the participation of official India in a wide and comprehensive fashion as well as the big hitters from the Indian corporate world, all of whom are stressing the scope and potential there is and in a wide variety of areas.

India, remarked Mr Harvey Shapiro, Senior Advisor of Euromoney Institutional Investor, has moved to the centre-stage of the global economy and there were variety of investment opportunities.

For his part in his welcoming remarks Mr Padraic Fallon, Chairman of the Euromoney Institutional Investor, argued that India is a tremendous important force in the global economy with the country well positioned in a number of areas.

Reflecting on the political and the economic strengths of India, the Chairman and CEO of Merril Lynch, Mr Stan O'Neil, called India a "remarkable country" where "what has changed is as incredible as what has remained the same". The growth and promise of India is "just at the beginning", he said.

For the most part the participants attending the two-day event came to primarily hear what Indian officials and the private sector had to say and offer - and they did in great detail.

But a lot of the attention was on Mr Chidambaram whose appointment as Finance Minister was seen as a "positive signal" for what lies ahead in the realm of investments heading to India.

In particular delegates attending the conference wanted to hear about the reform process and came away pleased that the Indian Minister stressed that the country needs "large amounts" of foreign investment - both institutional and foreign direct investment.

"Let me tell you categorically," Mr Chidambaram said, "India remains committed to the reform process. We will go forward on the reform path which was started in 1991.We will do our best to go faster in the road of reforms" stressing in the process that the present Government wants India to become an economic powerhouse.

"We have the human resources. We have the fiscal resources and we believe we can raise - with your support - additional resources. We believe we can bring to governance in India a sense of dedication, commitment and capability...It's not a matter of one individual's aspiration, it is an imperative," Mr Chidambaram said.

The Minister pointed out that India has to assure and convince the world that there is a fiscally responsible government which is confident of coming to terms with the challenges; and that the Government has to convince that it is not only open but also receptive and will facilitate for investment.

"I concede there are procedural difficulties," Mr Chidambaram remarked going on to say that some steps have already been taken like for instance in the approval route to the automatic route; the setting up of an Investment Commission within this month; and the establishment of the Cabinet Committee on Infrastructure headed by the Prime Minister. "The lingering doubts on hurdles to investment in India will be removed," the Finance Minister said.

At the end of the day the Minister said that by way of feedback, potential investors "seemed to appreciate the policy stances of the new Government. That was very heart warming. This is only the beginning," Mr Chidambaram remarked at a press conference.