Thursday, July 6 2006 10:06 Hrs (IST) - World Time -

New Delhi: Finance Minister P Chidambaram yesterday (July 5, 2006) assured India Inc that the government would encourage and 'actively' seek FDI in infrastructure sector and look into its demand for flexible labour laws and reform the power sector to push manufacturing growth to 12 per cent.

At an interactive session with apex chambers of Commerce and Industry, Chidambaram said Foreign Direct Investment (FDI) will continue to be encouraged and actively sought, particularly in areas of infrastructure, high technology and exports and where local assets and employment are created on a significant scale.

"As regards FDI, there are hardly any irritants on the policy front or in terms of major sectors that may need to be further opened up," he said, adding that with fiscal reforms and budget consolidation, mandating a gradual reduction in fiscal deficit, Government's pre-emption of resources is also expected to decline, reducing to that extent the crowding out of private investment.

The Finance Minister said it has been estimated that India has the potential to absorb 150 billion dollar of investment in the next few years in the infrastructure sector alone.

"Funds of this magnitude cannot be found from budgetary resources alone. One has to reach out to the private sector, and private savings, and to the other mechanisms available in the market today to raise funds," Chidambaram said.

"Public private partnership (PPP) in infrastructure development needs to be actively promoted. Both the Centre and the States have taken a number of initiatives in the last two years of the 10th Plan to promote infrastructure development through PPP," he said.