Chidu woos overseas Indians

Making a strong pitch to overseas Indians, finance minister P Chidambaram has said the country is a safe destination with a potential of 8% growth and ample investment opportunities. “The macroeconomic fundamentals and the microeconomic fundamentals make India an attractive and safe investment destination,” he said while addressing the second South Asian Diaspora convention in Singapore.
The government, Chidambaram said, has taken a number of measures to stabilise the economy and outlined multiple investment vehicles that the country offered. “India can offer to the investor a variety of investment opportunities. There are government securities and corporate bonds. There are mutual funds and infrastructure development funds. We can offer equity in our public sector enterprises that are under the disinvestment programme,” Chidambaram said.
The Indian equity market has given a compounded annual growth rate of 15.8% between 2003-2013 and government securities 7.92%, 8.52% and 8.36% in the last three years. “I believe that there are few markets in the world which give comparable returns,” he said.
He said there were a clutch of projects in the oil and gas sector that will welcome strategic investors and added that the government will shortly offer a public sector exchange-traded fund that will allow investors to buy units backed by underlying equity shares of quality public sector companies.
Chidambaram said India has a potential growth rate of 8% and above and during the 20-year period between 1991-2011, the average growth rate was 7%. Pointing out that the key to sustaining high growth rate is investment, the minister said the government will endeavour to contain fiscal deficit to below 3% of the GDP, safely finance the current account deficit (CAD) and keep inflation under 5%.
Referring to the recent volatility in exchange rate, Chidambaram said it was imperative for a government to insulate the currency from speculative attacks and excessive volatility. “We believe that the exchange rate of the rupee today is a better reflection of its true value and we are confident that both volatility and speculation have been largely contained,” he said, adding that the response to the rupee bond of International Finance Corporation indicated market confidence in the Indian rupee. The minister assured the investors that fiscal deficit in the current financial year will be contained at 4.8% of GDP and CAD at below $ 60 billion.
“For the current year, I have drawn a red line at the original target,” he said.

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