Close on the heels of Indian Prime Minister Manmohan Singh's observation that the country's economic growth will not make the targeted 8 percent mark over the10th Plan period, Finance Minister P Chidambaram on Tuesday said that the low level of investment was a cause of worry. "Against the targeted public and private investment of 275 billion US dollars (Rs.12.12 trillion rupees) for the 10th Plan (2002-07) period, the realization in the first three years was just 103 billion US dollars (Rs.4.55 trillion rupees)," Chidambaram told the meeting of the National Development Council in New Delhi.

He said that investments had to increase to at least 31.3 percent of gross domestic product (GDP) to achieve 7.5 percent economic growth.

"But the level of investment was pegged at just 26.3 percent of GDP in 2003-04," he told the council -- the country's highest deliberative and decision-making forum on development issues.

The NDC comprises the Prime Minister, all Chief Ministers, Lieutenant Governors and members of the Planning Commission, and gives a national character to the process of planning, and functions as an instrument of cooperative federalism.

The resources required to fund development is lower than even the revised target of 222 billion US dollars (9.81 trillion rupees)set by the Planning Commission in its mid-term appraisal of the 10th Plan, Chidambaram said.

The finance minister said one of the ways by which investment can be stepped up would be by containing unproductive expenditure and by either closing down public sector enterprises or selling the government's equity in them.

However, India's left Parties, which are supporting the Manomohan Singh-led coalition Government from outside, are bitterly opposed to disinvestment in public sector undertakings, especially the profit-making ones.

Chidambaram also advocated for continuing with fiscal consolidation in order to maintain a benign inflation and interest rate scenario to promote private investment.

Source: Xinhua