FDI approvals to double in 1997

NEW DELHI, July 24: Foreign direct investment approvals in 1997 are likely to be about double of last year. From $10.3 billion last year, the FDI for the year 1997 is expected to be over $19 billion. This calculation has been made by Industry Ministry based on the trend of foreign investment so far in the calendar year.

Till May this year $7.4 billion approvals had been given which is over 70 per cent of last year’s approvals. This rise is considered significant as it is far greater than the rise of experienced in 1996. In 1996 the FDI approval $ 10.3 billion, or about 10 per cent higher than the 1995 figure of $9.16 billion. The last time there was a jump in foreign investment proposals was in 1995 when the figures doubled over 1994.

Even the actual FDI inflow figures for the first half of 1997 show a higher trend. While the total inflow in 1996 was $2.4 billion, the figure for the first half of this year has already reached $1.7 billion.

But despite the increase in FDI flows, its ratio to total approvals still hovers around 25 per cent. officials say that lack of clear policy in areas such are power are responsible for this. Investment proposals for fuel production are about a fifth of the total proposals. “Since the Government is till finalising fuel policy, most of the foreign investors are waiting and watching ,” says an official. The FIPB has given approvals to about 72 power related projects in the past few weeks.