At a press conference held after addressing a meeting of investors organised by the Confederation of Indian Industry (CII) here, Wejesinghe said that his government wil encourage Indian investments in the fields of electronics, software, rubber, textile apparels and tourism. He added that Ashok Laylands, Shaw Wallace, Oberoi and Taj hotels have already made substantial investments in Sri Lanka.

He said that Sri Lanka's imports from India were $556 million while India's imports from that country were a mere $43 million. However, he informed that the total foreign capital inflow in Sri Lanka during 1997-98 was $430 million, of which $140 million was foreign direct investment. He added that there has been a 30 per cent hike recorded in the flow of foreign capital till the end of June this year.

GL Peiris, Sri Lankan minister of justice, Constitutional Affairs and National Integration said that his country has registered a growth of 6.4 per cent in its gross domestic product last year despite mounting war expenses and the turbulence in the South Asian economy. The Sri Lankan economy continues to maintain its growth momentum and the first quarter of the current year showed 5.8 per cent GDP and the relative assessment for the second quarter was around 5.5 per cent.

Peiris said that the budget deficit which was 10 per cent four years ago was brought to around 7 per cent and foreign exchange reserves totalled $2.5 billion equivalent to five-and-a-half months imports. He informed that Sri Lanka was now engaged in a massive divestiture programme to enable the private sector to play a major role in the economy and has already achieved success in the fields of steel, telecommunications, gas, port and airlines.

Peiris said his country has been making substantial investments in health and education in order to create high quality of human resources and has given a major thrust on expansion of physical infrastructure on the build-own-operate and build-own-transport. He added that a $240 million contract to expand the capacity of Colombo port has been awarded to a consortium led by P&O of the UK and John Keells Holdings of Sri Lanka.