The Union Commerce and Industry Minister, Mr Anand Sharma on Saturday expressed confidence that the country would be attracting more direct overseas investment this fiscal.
“Despite the gloomy world economy, we received highest FDI of $50 billion last fiscal and we are hopeful of attracting more this fiscal,” Mr Sharma told reporters here on the sidelines of powerloom industry function, without proffering any reason for his optimism.
The Minister’s statement comes in the wake of negative investor sentiment on account of General Anti—avoidance Rules (Gaar) which seek to retrospectively tax major corporate deals such as Vodafone-Hutch that took place in tax havens but had underlying physical assets in the country.
The FDI inflows spiked last fiscal to a record level due to a spate of big-ticket deals such as Cairn-Vedanta and Reliance-British Gas. As stock valuations dipped, overseas investors were eager to pick up stakes in domestic companies.
The country received $34.8 billion in FDI in 2010—11, but foreign investors also pulled out a record $10.7 billion in the 2011 calendar year, according to a Nomura report. However, overall the total FDI flows are still in the positive territory with an estimated $20 billion as of FY12.
On the worst macroeconomic numbers in the past nine years, the Minister said, “GDP growth rate of 5.3 per cent is very alarming and we hope this is now bottoming out.”