Finance minister P Chidambaram, who is currently on a Japan roadshow promoting India as investment destination, told the media that India’s economy is capable of absorbing USD 50 billion in foreign direct investment annually.
Addressing a news conference in Tokyo, Chidambaram also reiterated that growth in Asia’s third-largest economy was expected to accelerate in the current fiscal year to March 2014. He believes expediting infra projects will help growth, and in the last two months, investment panel had cleared projects worth USD 14 billion.
The finance minister blamed inflation on steep oil prices and said the government will try and curb it with supply side and monetary measures. Stressing that the cutting fiscal deficit gap and taming inflation are key challenges, Chidambaram said tolerance level for inflation in India is between 4-5 percent. He said the government’s aim was to reduce fiscal deficit to 3 percent of GDP by FY17.
India’s government is struggling to boost the economy, which has posted its weakest growth in a decade. Removing investment barriers, many of which date back to before India started opening up its economy in the early 1990s, has been key to the government’s push to restoring investor confidence.
