FM pitches for more investments to attain higher growth

Says both domestic investment and foreign investment must be encouraged

Finance Minister P Chidambaram today made a strong case for encouraging foreign and domestic investment to boost growth and said PSUs alone are expected to pump in Rs 1.33 lakh crore in the current financial year.

"Investment must revive in this country...The economy has stabilised. The investment cycle has to start again. Both domestic investment and foreign investment must be encouraged. That will lead us to high growth," he said while addressing the media at the AICC headquarters.

The minister said the capital expenditure plan of 23 public sector undertakings, including Oil & Natural Gas Corp, Oil India Ltd, Indian Oil Corp and NTPC, will go up to Rs 1.33 lakh crore from Rs 1.25 lakh crore in 2013-14.

He said the capital requirement of banks in 2014-15 is estimated at Rs 45,528 crore, as against Rs 14,000 crore in the previous financial year. In the interim budget, the government proposed to infuse Rs 11,200 crore in public sector banks.

Chidambaram said foreign direct investment inflows in 2013-14 would exceed $27 billion. The inflows were $26.95 billion in 2012-13 and as per the latest estimate, it was $26.9 billion during April-February.

The Finance Minister said inflation is being driven mainly by food items and the open market sale of food grains is a way of cooling prices.

While keeping inflation under check, Chidambaram said the central bank should keep in mind the need to spur growth.

He expressed confidence that the Reserve Bank of India would keep this in mind while deciding on monetary policy initiatives.

Asked about reports that the RBI Governor may be changed if the BJP-led alliance comes to power, Chidambaram said Raghuram Rajan has outstanding credentials and the new government must respect the appointment.

India's economic growth rate, which slipped to a decade low of 4.5% in 2012-13, is estimated to inch up to 4.9% in 2013-14. It is projected to increase to 5.5% in the current financial year.