PM panel to focus on raising FDI

The Prime Minister's Economic Advisory Council has been asked to consider ways to increase foreign direct investment (FDI) inflows, improve the finances of special category states and provide the government with early warning signals on economy-related issues.

It has also been directed to focus on creating quality jobs and increasing farm incomes.

"We have been asked to highlight early warning signals and issues requiring attention," the advisory council's chairman, C Rangarajan, told reporters after a meeting, where Prime Minister Manmohan Singh was given the monthly report for January 2005.

On the domestic front, the report mentioned the threat of oil prices spiking in the next few months and the possibility of the exchange rate falling marginally by the end of the fiscal year.

The January 2005 report mentioned the fact that, with the Chinese economy continuing to grow at a scorching pace, international commodity prices were unlikely to come down in the near future.

Growth in the US economy was, however, expected to slow marginally in the next fiscal year, leading to continued foreign institutional investment inflows, the report said.

By and large, the economy is expected to grow at about 6.5 per cent and inflation is likely to average around 5.5 per cent in the current fiscal year.

The report also highlighted the steep 14 per cent jump in investment rates over the past two years, as reported in the quick estimates for 2003-04, released by the Central Statistical Organisation.

The 'India FDI Project', a report on attracting foreign direct investment, prepared by a group of non-resident Indians headed by Victor Menzes of the Citigroup, has been submitted to the council for deliberation.