India would see "more action" on the foreign direct investment front in the coming months, Ashok Lahiri, chief economic adviser to the finance minister, said on Wednesday.
Lahiri told the media that the "feel good" factor generated by a good monsoon had lifted the confidence of foreign investors.
FDI inflows in July this year were higher at $180 million, compared to $154 million in July 2002.
However, during the first quarter of the current fiscal, the cumulative FDI inflow was $351 million, significantly lower than the $1,065 million recorded in April-June 2002.
Lahiri said there was a 'lumpiness' in FDI and it would be difficult to say which sectors would attract more of it. However, food processing was one sector where a revolution was waiting to happen, he added.
He said the improvement in physical and social infrastructure and better quality of human capital would enable India to attract higher FDI.
The recent moves of setting up a Foreign Investment Implementation Authority and bringing the Foreign Investment Promotion Board under the finance ministry were aimed at giving a big push to foreign investment in India, he added.
Lahiri said the finance ministry had redefined FDI by including 14 more items, like reinvested earnings by subsidiaries of foreign companies in India and inter-corporate debt transactions between related parties, to align it with those of other countries.
Accordingly, the FDI inflow for the last fiscal is now pegged at $4.66 billion, compared to $2.574 billion as estimated earlier.
For 2001-02, the revised figure is $6.1 billion, up $2.2 billion from the $3.9 billion calculated according to the previous definition.
For 2000-01, the revised figure is $4 billion, $1.7 billion more than calculated earlier.
The reclassification has also resulted in India's investment abroad shooting up to $1.05 billion in 2001-02, compared to $459 million as originally estimated.
However, this was a dip compared to the $1.39 billion (as per the revised definition) investment made by India in foreign markets in the previous year.
Lahiri said Maharashtra remained the top investment destination among states, having received 17.4 per cent of the cumulative FDI inflows between August 1991 and June 2003.
Delhi occupied the second slot, accounting for 11.95 per cent, while Karnataka and Tamil Nadu shared the third spot, having attracted 8.3 per cent of the FDI inflows.
India's cumulative FDI inflows between August 1991 and June 2003 stood at $22.2 billion excluding ADRs and GDRs. The total FDI, including ADRs/GDRs, was higher at $ 33.53 billion, Lahiri said.
Mauritius accounted for a big chunk of the FDI inflows into India, accounting for 34 per cent of the cumulative inflows between August 1991 and June 2003, followed by the US 16 per cent) and Japan (7.8 per cent).
Responding to a query if states would be roped in to promote FDI, Lahiri said, "Every Indian resides in states and not at the Centre." He added that efforts were on to streamline coordination with states. States' representatives worked closely with the FIPB, he said.
Electrical equipment including electronics and computer software attracted the maximum amount of foreign investment (14.49 per cent) between August 1991 and June 2003, followed by telecommunications (12.83 per cent), transportation (10.7 per cent), fuels (including power and oil refining) (10.2 per cent), services (8.2 per cent), chemicals (excluding fertilisers) (6.5 per cent) and food processing (3.9 per cent).
