India working on a new economic model: PM

Declaring that India is working on a 'new model' to integrate itself with the increasingly interdependent global economy, Prime Minister Manmohan Singh on Monday assured top British businessmen that the country welcomes foreign investments, but said privatisation as an ideology was unacceptable.

Addressing 23 chief executives of top British companies at a breakfast meeting in London, Singh said: "India is working on a new model in the increasingly interdependent global economy. India today is more open and welcomes foreign investments."

"We do not accept privatisation as an ideology. We do not take ideological view of privatisation but take a pragmatic view and, wherever it serves national purpose, we will pursue privatisation" he said.

On India's views on the World Trade Organisation, the prime minister was quoted as saying by his media advisor Sanjaya Baru and external affairs ministry spokesman Navtej Sarna that "India was for a rule-based global trading regime."

Singh also spoke of a healthy trend in trade relations with China.

Asked about the current pace of political debate on privatisation, Singh said: "Profit making PSUs were working in a competitive environment. There was no earth-shaking reason to pursue privatisation."

On privatisation in Railway sector, he said: "This has not engaged policy attention in India. But in future, there could be a debate on this."

Asked about the draft paper of the Reserve Bank of India on foreign investment in private banks, Singh said: "The RBI has initiated debate on its draft note and a final word has not been said on the government policy. Based on the feedback, government will evolve a policy in this regard."

He said RBI Governor Y V Reddy has also clarified that this was a draft note for debate and discussion, and the final decision of government has not been announced.

The issue of hike in FDI limit in insurance from 26 to 49 per cent also figured in meeting and the prime minister explained that government policy remains what Finance Minister P Chidambaram announced in the budget, the officials, quoting the prime minister, said.