Chidambaram supports Chinese investments

Finance Minister P Chidambaram today said he was in favour of allowing Chinese companies to invest in India.

"I am personally in favour, but there could always be one or two cases where the government may decide to keep out a Chinese company. Each case will be decided on merit," he said.

Chidambaram made these comments in response to a question at a press conference on the state of the Indian economy.

The FM's remarks, coming just days ahead of a key IMF meeting in Singapore, are important when seen in the context of some reports suggesting that a new security related investment law was in the works.

"No such law is being proposed. I have not seen it," he said when a reporter mentioned that the National Security Council was drafting such a law.

Chidambaram said that any exceptions made to allowing free flow of overseas investments would not affect overall FDI inflows. "All indications are that in the current year, FDI inflows will be higher than the previous year," he said. FDI inflows during 2005-06 stood at $5.54 billion, 72 per cent more than the $3.21 billion in 2004-05.

Revealing a little of his impatience with the existing gradualism in reforms, Chidambaram said the country was losing opportunities. "I would like a little sense of urgency (on this front)," he said, and added that the purpose of disinvestment had been misunderstood.

Highlighting key macro-economic parameters and data, the FM reiterated that deficit targets would be met. "I am confident that we would maintain the fiscal deficit and revenue deficit at the budgeted levels of 3.8 per cent and 2.1 per cent of the GDP respectively," he said.

Earlier during the day, Chidambaram met financial advisors of central government departments and ministries and asked them to remain within the Budgetary estimates for expenditure.

"The sanctity of Budget figures must be maintained. Only completely unanticipated expenditure should be presented for supplementaries," he said.

He added that Prime Minister Manmohan Singh recognised the validity of the argument to keep within Budgetary targets.