Chief Economic Advisor Raghuram Rajan on Friday said the government is examining all possibility of raising foreign direct investment ceiling in various sectors to help increase inflows and prop up economic growth.
Greater Noida: Chief Economic Advisor Raghuram Rajan on Friday said the government is examining all possibility of raising foreign direct investment ceiling in various sectors to help increase inflows and prop up economic growth.
"We are examining all possibilities for FDI," Rajan said when asked on the sectors he would like to see investment coming in.
"But really, what we need is FDI in areas where we can benefit from technology. Technology in logistics is what we begin with in retail... If logistics chains can help us bring produce from the farmer to the table top in a much more effective way with less inefficiency less wastage that would a boon for everybody, the consumer, the farmer and the country as a whole," he said on the sidelines of a seminar at the ADB annual meet here.
"More investment will help...More investment from the western manufacturers and domestic retail. All that will help. So, our main job is to get back to high growth," he added.
Yesterday, the government approved Swedish furniture major IKEA's proposal to invest Rs 10,500 crore-- the biggest ever FDI proposal in single brand retail-- for setting up home furnishing stores in the country.
In order to re-energise growth, he said "we are trying to get those (stalled) projects back on track that would be the most immediate thing we can do...We are also trying to resolve coal pricing.. There are a number of non-legislative actions that the government can do in the next few weeks."
Asked about the RBI's projection of 5.7 percent growth for the current fiscal, Rajan said, he is hopeful that economy will grow over 6 percent.
"Different organisations have different forecasts, the world bank recently said, above six, ADB says 6. I think everybody centred plus or minus few basis point around the 6 per cent number. We gave the wide band and we are still sticking to that.
On inflation, he said, CPI inflation is still high and there is room for moderation.
"There are two aspects on inflation...WPI inflation has already come down a fair way. But yes, may be there is less room there. What we do hope is that food inflation will come down, that would give some relief on CPI side, which can also help, because after all, that is the inflation that people see."
During March, consumer price index was in double digit at 10.39 percent.
On tax, Rajan said "We have to be very careful about raising marginal tax rates too high. So across the world, certainly India, the focus is on can we broaden the base, can we make people, who should be paying taxes actually, those pay taxes."
If you broaden the base, resources will increase, he said at the seminar.
Rajan also said that there is need to create business friendly environment and protect interest of workers.
"We need to create a more business friendly environment. We are working on it. We need to work on our labour laws to make it business friendly and protect interest of workers," he said.