India has liberalised foreign investment policies and created a “very favourable investment climate” for investments across all segments of economy -- agriculture, manufacturing and services, finance minister Arun Jaitley told the Development Committee meeting of the International Monitory Fund (IMF). Mr. Jaitley said Foreign Direct Investment (FDI) inflow in India has increased by over 30-40% in last two years and India was now “the largest FDI destination in the world.”
Mr. Jaitley told another meeting at IMF that the Modi government was following the approach of ‘Reform to Transform India’ through far reaching structural reforms. The measures undertaken by the current government include investment in infrastructure investment, a bankruptcy law, improvement in business climate and tax reforms such as GST. “The government is taking steps to reform institutions, simplify procedures and repeal obsolete laws,” the Minister said. “A progressive and non-adversarial tax regime incorporating best international practices is being put in place,” Mr. Jaitley told the meeting of the International Monitoring Committee.
The Minister urged the Fund to maintain close oversight upon emerging vulnerabilities, and “remain committed to safeguarding the stability of the international monetary and financial system.” “In order to be a reliable source of contingent financing it is important to assess the sufficiency of Fund’s resources in accordance with the changing global realities including levels of global growth, size of trade and capital flows,” Mr Jaitley said.
Mr.Jaitley called for quicker progress in the efforts to further enhance the Fund’s lending capacity. “We consider that changes in quotas including fresh review of quota formula, is necessary to reflect fairness and equality in the governance of the Fund in order to reinforce its legitimacy,” the Minister said. Noting that the participation of advanced economies, especially, the United States in the Fund is a valued source of its institutional strength and credibility, Mr. Jaitley said the Fund must “continue to evolve as an effective institution in tune with changing character of the global economy.”
