Govt to look into FDI impact on rural sector

The government has agreed to set up an expert committee to look into the impact of foreign direct investment (FDI) in certain sectors of the rural economy.

This was decided yesterday at a meeting of the Parliamentary Consultative Committee (PCC) headed by Commerce Minister Kamal Nath.

According to the commerce ministry, the purpose of the exercise is to ensure equitable distribution of FDI and to bridge the rural-urban divide.

Earlier, addressing the members of the committee, Nath said FDI inflows into the country had witnessed a quantum leap in the current financial year and were expected be more than double the last year's inflows.

FDI equity inflows during April-November 2006 were $7.2 billion, the highest since the start of economic reforms, he said, adding that monthly inflows this fiscal crossed the $1-billion mark in July, October and November 2006.

The minister said FDI inflows by the end of the fiscal would reach $12 billion which would be 120 per cent more than previous fiscal.