Right things by India before Obama meet will help capital: PM

Written by Shobhana Subramanian | On board the PM?s aircraft | Updated: Sep 8 2013, 06:35am hrs
With a view to attract more foreign direct investment (FDI) from the US, the government is working on measures to ensure that it becomes easier for US corporations to invest in India. With the PM Manmohan Singh headed for the United States later this month, where he will meet with US President Barack Obama, the government hopes to be able to convince the US authorities that US companies will not be harassed from a regulatory standpoint and that the environment will not be adversarial.

If we do things right before going there, they will have an influence on the climate for capital flows from the US to our country, Singh said on Saturday, without elaborating on the subject. Speaking to newspersons, the PM also hoped that his forthcoming visits to Russia, Asean and later China would help attract investments. All these countries are our trade partners and, therefore, whatever we may do in these meetings, they create a climate conducive to accelerating the process of cooperation between us in matters relating to trade and investments, Singh observed.

The PM hoped that the World Banks proposal on a global infrastructure financing facility would come through since it would help India. The statements made by the president of the World Bank on world infrastructure financing facility, if that comes about, will certainly help us greatly, Singh said.

He noted that while the $50 billion currency swap agreement with Japan will help, eventually, the fundamentals of the economy need to be in robust health. Parliament has passed some important legislations. That will also help to revive confidence and we have to work to ensure that the fiscal deficit does not exceed 4.8%. Whatever we can do to contain the current account deficit, will be put in practice, Singh said.

Singh said while there was widespread appreciation about the unintended consequences of unorthodox monetary policies being pursued by countries like the US and the euro zone, he didnt see any immediate concrete action since central banks were the creation of their domestic legislations. Some value their independence, some also have a limited mandate, but there was general appreciation that when it comes to consultations on global economic policies, macro-economic policies, for example in the mutual development process, the countries should be discussing how monetary policies are being shaped, what are the concerns and how we can soften the impact on other countries, he observed.