New Delhi, Nov. 22: Finance minister Jaswant Singh said today the country is poised to achieve the economic growth-rate target pegged at 8 per cent and that the government will go-ahead with the divestment of state-run companies.
“We are committed to disinvestment. We believe it is an integral part of our reform process to achieve the 8 per cent growth rate and we believe it is achievable,” he said.
Singh today addressed a joint news conference with the United States Treasury secretary Paul O’Neil after a Cabinet-level meet between the two countries on ways and means to boost growth and strengthen the capital markets of both countries.
Singh said the country’s economy was doing well if seen in the context of the stuttering global economy. “We have done well in spite of a severe drought, a stand-off at the border with Pakistan and the prevailing uncertainties of the Gulf situation.”
On being asked to comment why growth in foreign direct investment was negligible when compared with China, Singh said, “I think the principal impediment is the turgidity of our system that restricts the free flow of investments in India.”
“I believe that the FDI between the potential and what it gets today is a fraction,” he added.
Singh also said the government was making efforts to streamline the flow of FDI and that the economic growth rate is inching up. The country’s foreign exchange reserves stood at $ 65 billion and exports for the period April-September have posted a growth of around 7.9 per cent year-on-year.
“The industry is growing at a 6 per cent rate along with a current account surplus and comfortable foreign exchange reserves,” Singh said.
“India is a federation and the states are jealous of their rights but we are making efforts to smoothen the process,” Singh said.
He added that the governor of the Reserve Bank of India had stated that on an average India receives $ 500 million per week in different contexts (including FDI).
India and the US agreed on the need to promote trade and services in both traditional and non-traditional areas. The vulnerability of the financial system to abuse for terrorist purposes especially through the use of non-traditional remittance systems figured prominently in the discussion.
“I found our conversation very fruitful with regard to moving forward in strengthening our ability to identify tainted money, figuring out ways to trade between the two countries, and financial implication for strengthening of our cross-economic relationship,” Paul O Neil said.