Fx reserves use to be against import of equipment

The government would consider using foreign exchange reserves for funding infrastructure against import of equipment.

The finance minister P Chidambaram today said that the government would enhance investment in infrastructure.

"The question is whether this will be raised through the budget or channelled through foreign exchange reserves," said Chidambaram.

The country today has forex reserves in excess of $130 billion.

However, the prime minister, Manmohan Singh, had earlier in his inaugural address stated that the economy would need to absorb up to $150 billion of investment in infrastructure over the next decade in order to increase the growth rate.

Both the PM and the FM appealed to non resident Indians (NRIs), asking them to made direct investments in their home country. "I believe NRIs must mean non resident investors," said Chidambaram.

While NRI remittance has helped strengthen India's balance of payment, "we want that to be transferred from savings to investment. This is the art of governance to convert savers into investors," added the FM.

Much of the $150 billion infrastructure funding needed would have to come by way of foreign direct investment, said Manmohan Singh.

"A substantial part has to come from overseas Indians.. India needs your investment, and we are committed to make India attractive enough for you to invest here," he added.

Meanwhile, the prime minister today said the country was open to overseas financial assistance for rehabilitation programmes in Tsunami-affected areas. The country was capable of meeting the challenge of immediate relief operations without overseas financial assistance.

"Primarily India has refused overseas financial assistance for relief operations in Tsunami-affected areas," Chidambaram said.

He denied that India had taken an isolated stand on receiving foreign aid.

India in the long term would be open to overseas financial assistance for rehabilitation programme, which would include designing lost structures, rebuilding infrastructure and cleaning coastal areas, said Chidambaram.