Indian PM vows to attract more foreign investment

Indian Premier Manmohan Singh on Wednesday used his Independence Day speech to promise to improve conditions for foreign investment in the country after a sharp downturn in economic growth.

India recorded near double-digit expansion over much of the last decade but the economy grew by just 5.3 percent in the January-March quarter, a rate that threatens to stall its transformation since the early 1990s.

Singh said that the government would "leave no stone unturned to encourage investment", and vowed to increase spending on much-needed infrastructure projects such as roads, railways and the electricity network.

"To attract foreign capital, we will have to create confidence at the international level that there are no barriers to investment in India," Singh said, signalling that further liberalisation reforms were in the pipeline.

Foreign companies keen to tap into India's emerging consumer market have poured into the country, but have often struggled to thrive amid government policy U-turns, endemic corruption and red tape.

Foreign direct investment into India collapsed by 65 percent year-on-year in the April-June quarter, according to the Reserve Bank of India.

The ruling Congress party is already concerned about general elections due in 2014, and the prime minister has launched a campaign to revive its flagging fortunes since P. Chidambaram was named as finance minister two weeks ago.

Singh, delivering the annual Independence Day address at the Red Fort in Delhi, said that "a difficult phase" for the world economy had merged with India's domestic situation to hinder growth.

"We cannot do much about the conditions that prevail outside our country," he said. "But we must make every effort to resolve the problems inside our country so that our economic growth (is)... again speeded up."

He added that growth must be obtained while controlling inflation, which is likely to be stoked by this year's poor monsoon -- though the headline rate unexpectedly dropped to 6.87 percent in July from 7.25 percent in June.

Singh, 79, who is expected to step down at the end of his term, repeated his forecast that annual GDP growth would exceed last year's rate of 6.5 percent, a prediction dismissed by opposition leaders and many independent economists.

Ratings agency Moody's last week scaled down its growth outlook for Asia's third largest economy to 5.5 percent in the fiscal year ending March 2013.

The Congress-led government elected in 2009 has struggled to push legislation through parliament due to constant protests by opposition parties and even its coalition partners.

Singh blamed the lack of political consensus for the failure to create rapid economic growth and said that the problem was damaging stability in India.

"If we do not increase the pace of the country's economic growth (and) take steps to encourage new investment in the economy... then it most certainly affects our national security," he said.

Among moves that have spooked foreign firms was the announcement followed by the sudden withdrawal of reforms allowing retail giants such as Wal-Mart into India, as well as a retrospective tax bill for Vodafone.

The premier's speech, marking the end of British rule in 1947, also included a vow to provide electricity to all households within five years and proposals for a new law to end the "repulsive practice" of manual removal of human waste.

The main opposition Bharatiya Janata Party (BJP) dismissed the speech as lacklustre and uninspiring.

Police said no one was injured when four roadside bombs exploded in the northeastern state of Manipur, which has seen decades of separatist violence.


Editor’s note:Yahoo Philippines encourages responsible comments that add dimension to the discussion. No bashing or hate speech, please. You can express your opinion without slamming others or making derogatory remarks.

  • Philippine, Vietnam troops play sports on disputed island
    Philippine, Vietnam troops play sports on disputed island

    Filipino and Vietnamese troops played football and tug-of-war on a disputed South China Sea island on Wednesday, officials said, closing ranks as their rival China ramps up construction of artificial islands. The games took place on Philippine-held Northeast Cay, just 2.7 kilometres (1.7 miles) from Southwest Cay which is controlled by Vietnam, where a similar contest was held last year. "It was a navy-to-navy confidence-building engagement," Vice Admiral Alexander Lopez, the Philippine …

  • ‘Inland areas could be exposed to tsunami-like waves’
    ‘Inland areas could be exposed to tsunami-like waves’

    While strong earthquakes cause tsunamis in coastal areas, the Philippine Institute of Volcanology and Seismology (Phivolcs) warned that inland areas could also be exposed to tsunami-like waves, or seiche, if located near or around bodies of water. In a recent earthquake awareness seminar in Muntinlupa, Phivolcs supervising science research specialist Joan Salcedo explained that a seiche is a large wave similar to a tsunami, triggered by strong ground shaking from an earthquake or volcanic …

  • China gives ‘gentle reminder’ to Phl, warns small nations
    China gives ‘gentle reminder’ to Phl, warns small nations

    China gave the Philippines a “gentle reminder” last Tuesday that Beijing will not bully small countries but warned these nations not to make trouble willfully and endlessly. “Here is a gentle reminder to the Philippines: China will not bully small countries, meanwhile, small countries shall not make trouble willfully and endlessly. The Chinese Foreign Ministry also said that China would continue to build other civilian facilities on relevant maritime features in the disputed Spratly Islands …

  • Back-channel diplomacy pushed for Phl-China dispute
    Back-channel diplomacy pushed for Phl-China dispute

    The Philippines should consider backchannel diplomacy to prevent its territorial dispute with China from deteriorating further, Sen. Ferdinand Marcos Jr. said yesterday. There are a lot of Filipino businessmen with businesses in China and they have friends and connections there. Let’s utilize that, ask them to talk to their friends on how we can resolve this matter peacefully,” Marcos said. …

  • Phl, Japan to deepen ties amid China sea claims
    Phl, Japan to deepen ties amid China sea claims

    Japan and the Philippines are set to bolster security ties when President Benigno Aquino visits Tokyo next week, the latest move by Prime Minister Shinzo Abe to beef up cooperation with Southeast Asian nations facing China’s growing naval ambitions. The two sides will likely agree to start talks on a framework for the transfer of defense equipment and technology and to discuss a possible pact on the status of Japanese military personnel visiting the Philippines to facilitate joint training and …

  • Phl, Vietnam troops play soccer on disputed isle
    Phl, Vietnam troops play soccer on disputed isle

    Vietnamese and Philippine troops played soccer and sang karaoke on a South China Sea island yesterday in a sign of the growing security ties between the two Southeast Asian nations most at odds with Beijing over the contested waterway. Cooperation has blossomed between Hanoi and Manila since they shelved decades of enmity over their competing claims in the Spratly archipelago to try to counter China, whose creation of artificial islands in the region will allow it to project power deep into …

  • Noy swears in 50 newly appointed AFP officers
    Noy swears in 50 newly appointed AFP officers

    President Aquino administered yesterday the oath taking of 50 newly appointed generals and officers of the Armed Forces of the Philippines (AFP) in a simple ceremony at the Rizal Hall of Malacañang Palace. …

  • Taiwan’s peace call on claimants of disputed territories welcomed
    Taiwan’s peace call on claimants of disputed territories welcomed

    The US on Tuesday welcomed Taiwan’s call on all claimants to disputed shoals, reefs, rocks and islets in the South China Sea and West Philippine Sea to exercise restraint, refrain from unilateral actions that could escalate tensions, as well as to respect international law as reflected in the United Nations Convention on the Law of the Sea. “With regard to the maritime claims and the claims to sovereignty over land features in the South China Sea, our position is that maritime claims must …


Should Aquino be held accountable over the Mamasapano operations?

Poll Choice Options