Monday, December 12 2005 14:16 Hrs (IST) - World Time -

Kuala Lumpur: Admitting that India's infrastructure was not 'top class', Prime Minister Manmohan Singh today (Dec 12, 2005) promised to 'dismantle unwanted barriers' and expand global capital flows to attract $150 billion in the sector, particularly in the modernisation process of Chennai and Kolkata airports.

Addressing business leaders ahead of his meeting with ASEAN leaders and the East Asia Summit, he also mooted a Pan-Asian Free Trade Area along the lines of North American Free Trade Area and pledged to bring down tariffs to promote trade with Southeast Asia.

"India's infrastructure is not top class. But we are working on it. You will see a qualitative and quantitative sea change soon," Singh said addressing the Asean Business Advisory Council.

In March, he said, "We will throw open Kolkata and Chennai Airports for public-private motion."

"The process for private-public arrangement for Delhi and Mumbai has already begun and in five to six years India's infrastructure will undergo a sea change," Singh promised the Council inviting them invest in the lucrative Indian market.

"I invite Asean entrepreneurs to test the waters of our country. I see enormous opportunity for a two-way trade, which is expected to double by 2007 to $30 billion. An act of investment is an act of faith. I invite you to have faith in our system."

"The Prime Minister said he would work to dismantle trade barriers between the countries of the region. "We are committed to bringing down tariffs to levels prevalent in ASEAN countries to dismantle unwarranted barriers and to expand global capital flows," he said.

The Prime Minister, who is meeting ASEAN leaders tomorrow (Dec 12, 2005), said his country was aiming at a high 9-10 per cent growth.

To the demand for opening up the retail sector to FDI, Singh acknowledged there were problems on this issue but "recognising the immense opportunities in this area, it is being debated within the Government. We will come up with positive outcome in 5-6 months."

Promising to replicate the success of highway expansion, currently underway, he said the next sector would be the railways where to begin with the Government would create a freight corridor on Delhi-Mumbai and Delhi-Kolkata sector.

"In the last 4-5 years the road sector has changed, so also a sea change in the telecom sector in which we are adding two million new connections every month," he said, adding, "Modernisation of infrastructure across 60 cities have begun recently."

Admitting land prices were still too high in India, Singh said Centre has already taken steps to revamp the Urban Land Ceiling Act and was nudging states to do the same. There were some problems with some State Governments which were being sorted out.

Asked about politicians trying to interfere with business decisions as in the case of modernisation of airport in Bangalore leading its Chairman Narayana Murthy of Infosys to step down, Singh said, "I cannot promise there would not be any problems. There will be relations between politicians and businessmen. We are a functioning democracy."