India's FDI potential can up its GDP: Report

new delhi: india''s potential to attract over $100 billion foreign direct investment in the next five years could raise the gdp growth by at least 1.5-2.0 per cent, a report by american chamber of commerce has said here. "attracting $100 billion in fdi will increase the total investments as a percentage of gdp by 4.5 per cent. we estimate, this will increase the gdp growth rate by at least 1.5-2.0 per cent," the chamber said in the report.the total fdi potential include $43 billion in the domestic sector, $11 billion in export-oriented sectors and $49 billion through privatisation, it said. the report said four domestic sectors-energy, telecom, financial services and food and beverages-could attract as much as 50 per cent of total fdi expected to flow in. energy sector could attract $12 billion, $4.5 billion could come into telecom, $3.6 billion in financial services, and food and beverage sector could attract $1.5 billion worth fdi, the report added. during the last nine years, india attracted only $15 billion in domestic sector due to sectoral policy, red tape and restrictions on foreign ownership, it said. about privatisation, it said the cabinet committee on disinvestment should target around 30 public sector units in a year for making a quantum jump from five billion dollar disinvestment proceeds upto 2000. the $49 billion fdi potential through privatisation included $13 billion in energy, $8.4 billion in telecom and $5.9 billion in financial services. seeking removal of branch restrictions on foreign banks, the american chamber''s report asked for fresh licenses to foreign banks, progressive cut in cash reserve ratio to less than six per cent and statutory liquidity ratio to less than 10 per cent, apart from reduction in priority sector lending to below 10 per cent. it also wants allowing mutual funds to manage provident funds. it said prime minister''s monitoring of fdi targets every two years would help the government realise the fdi potential. the chamber mentioned the need for setting up an apex committee under the commerce ministry, comprising secretaries of key sectors, for revieweing the sector-specific policies, expediting the current projects and monitoring the implementation on a quarterly basis. it also asked for estabilshing an advisory committee of ceos of foreign companies and their joint venture partners in india. "this committee should meet with the apex committee every quarter to provide feedback on policies and report the status of implementation," it said. although the ministry of commerce is considered the only agency for fulfilling fdi targets, the ministry of external affairs should coordinate and lead the marketing efforts, with embassies given the geographical responsibility for achieving targets. "the ministry of finance should review the macroeconomic impact of a policy recommendations and implement those that fall under its ambit," the report said, citing the excise duty.