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The annual headline inflation is expected to moderate to near 5% as there was reasonable price stability in some major commodities, the finance minister said on Thursday.
P Chidambaram made the comment in a lecture at the National University of Singapore.
India's wholesale price index based headline inflation rose to an eight-month high in October at 7%, driven by costlier fuel and manufactured goods, raising the prospect of a fresh interest rate hike.
Chidambaram also said the fiscal deficit target of 4.8% of gross domestic product in 2012/13 would not be breached under any circumstances, even as many private economists say the deficit could cross the 5% mark.
Appealing to foreign investors to invest in India, FM said that no country in the world requires so much investment as India does in virtually every sector of the economy. On infrastructure alone, the 12th Plan document covering the period 2012-2017 envisages an investment of $1 trillion, of which one-half is expected to come from the private sector.
"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. There is a clutch of projects in the oil and gas sector that will welcome strategic investors. Shortly, we will offer a public sector Exchange Traded Fund that will allow you to buy units backed by underlying equity shares," he added.
He also said a special window to attract more funds into FCNR(B) opened by the Reserve Bank of India two months ago will close on November 30. It has so far received $16 billion. The FCNR(B) allows the account holder to retain his deposits in foreign currency and earn interest at a rate up to LIBOR plus 400 bps.
