Union finance minister P Chidambaram on Saturday brushed aside criticism of FDI in retail, saying “it is not an option, but an imperative. The question is not whether we shall have FDI or not? The question is how to bring foreign investment into India”.
Referring to the disruption of Parliament for the second consecutive day over the issue, Chidambaram said: “The future of the country depends on the path we take. Argue all that you want, but, at the end of the day, there has to be a consensus and unity of purpose. I am confident that after my talks with the Opposition, we will be able to get over the hurdle and we would be able to push through more reforms.”
The minister was speaking at a special ‘Reinventing India’ lecture series organised by the Pune International Centre ( PIC) on Challenges as Opportunities: The Experience of Liberalizing the Indian Economy.
“The current account deficit has burgeoned to $70 billion and has to paid for in hard currency and not in rupees. Of the three ways of raising funds — FDI, FIIs and ECBs — FDI in retail is our best bet. This is because the money that comes to India stays in India and is not debt. It is risk investment and is the confidence shown by other countries in our economy,” he said.
“ How do you find $70 billion or hard currency unless we have to run down our reserves of $ 290 billion?” he asked.
Citing examples of how India earlier converted challenges into opportunities, Chidambaram said the huge bill of current account deficit could turn out to be an opportunity for reforms and this, in turn, could bring in reforms in many other sectors of the economy, including infrastructure.
“India is slated to become the third largest economy in the next 15-20 years with two options — a poor country with a large per capita income or a middle income country with a large per capita income. I hope that India becomes the third largest economy and a middle income country with a large per capita