Dubai: While acknowledging that there is slowness in decision making and bottlenecks that deter foreign investors, Indian Finance Minister P. Chidambaram said on Thursday that the government of India, while taking the necessary steps to expedite the sanctioning of infrastructure projects that requires massive funding, is also totally committed to guarantee the security of foreign investments.
“Whatever may be our obligation, we will never, never compromise on the integrity of the [foreign] investment…our word here is our honour,” Chidambaram said at a private meeting of a select group of Emirati and Indian investors in Dubai with an aim to boost capital flows into Asia’s third-largest economy.
Earlier in the year, before he presented the Union budget on February 28, he made similar investor meet visits to Hong Kong, London and Frankfurt. Since he took over as India’s finance minister on July 31 last year, the government has opened up the retail sector and pushed for reforms that would allow foreign investment in aviation, insurance and pension sectors. In his budget presentation, the last before next year’s election, he has promised to bring down fiscal deficit to 4.8 per cent from the current year ending of 5.3 per cent.
International investors, he said, had a good opportunity to invest not just in the $25 billion government securities and in $51 billion corporate bonds where sub-limits have been removed making it easier, for example, to change tenures, but also in infrastructure debt funds.
With the Infrastructure Debt Funds (IDFs) able to offer a better price and promoted by some of the best business houses and banks of India such as Life Insurance Corporation of India and Bank of Baroda, Chidambaram said that “this is a huge opportunity for investors to invest in India.”
On the issue of exiting investments, he assured the gathered investors at the meet, organised by Barjeel Geojit Securities, that there should not be any problem.
“On the capital account, the rupee is fully convertible — you can bring money in and you can take out,” Chidambaram said. Looking at net capital flows, he cited that there is an equal amount going out of India as there is capital coming into it.
Addressing the concern of a member of the audience on dispute resolution procedures in the context of the cases such as UAE’s Etisalat licence in India being cancelled by the Supreme Court of India and the company withdrawing, the minister said that while such instances are commercial in nature and are “rare”, but “I wish commercial disputes were resolved quicker.”
More than foreign investors, he said he is impatient when decision making becomes slow. To address the issue of slower decision making, the government has set up a Cabinet Committee of Investments, chaired by the prime minister and it has all the key ministers of the Cabinet.
In less than two months, he said the cabinet committee has cleared five oil and gas exploration projects, valued at $2.9 billion and other major power and road projects. And next week, he added, the committee is going to consider 31 additional oil and gas exploration projects, which involves massive investments.
While land, mining and forest clearances and fuel supplies pose as obstacles to such projects, the finance minister said that no problem is insurmountable and all that is needed is to find a rational solution to the problems by forging a consensus.
