In the backdrop of demands for opening multi-brand retail for FDI and liberalising the regime for other sectors like defence, Prime Minister Manmohan Singh today admitted tthere was a need for "favourable" environment for fund flow from abroad.
"I think we need to strengthen the resolve to create favourable environment for larger flow of funds from abroad", he said.
Addressing editors of electronic media here, he, however added the government's policies could not be blamed for drop in FDI as the current international scenario was prompting foreign funds to move out from emerging markets.
"It is not our mistake (downflow in FDI). The international situation is such that funds are moving out of emerging markets. We are today functioning in an environment where what happens outside affects us," Singh said.
"Therefore is not easy to say that what happens to fund flow is entirely a function of our policy," he added
The Prime Minister also stated that policies followed by the developed economies also played a part in foreign investments coming into India.
"It is also a function of what policies our other friends, particularly, the developed countries adopt," he said.
During April-December of the current fiscal, FDI inflows declined by 23.14% to $16.03 billion over the year ago period.
The Government has taken several steps like initiating discussions on opening multi-brand retail for FDI.
It is also in process of analysing feedbacks received from stakeholders to further liberalise the defence sector. Currently, 26% FDI is allowed in defence manufacturing.
