Thursday, September 22 2005 14:34 Hrs (IST) - World Time -

New York: Inviting foreign investors to take advantage of the 'huge possibilities' that exist in the infrastructure sector, Finance Minister P Chidambaram has said India has drawn up ambitious plans to upgrade all sectors over next several years.

"The Government is determined to put in a world class infrastructure to push all round growth," the Minister said identifying power, roads, shipping, oil and gas and aviation as the sectors, which would need major sustained investment.

The Indian economy is growing at a rate of seven per cent, which could easily go up to nine per cent if the country is able to develop infrastructure and get investments, Chidambaram said in his keynote address at the second annual India Investment Forum here.

"Foreign Institutional investors (FII) have great confidence that their money is safe in India and there is no reason for the private investors to thing otherwise."

"Foreign Institutional investors seem to think India is the flavour of the season. I wish to say that if India is good enough for FIIs, India is good enough to attract FDI," the Minister told the gathering of investors early this week, billed as the largest and most high profile investment forum for India in the US this year.

Chidambaram, however, conceded that country might not have been able to project properly the opportunities it offers for private investment.

He said that rising oil prices are putting a strain and the budget is hurting because huge resources have to be put aside to pay for oil. "We are not able to pass the entire price increase to our consumers."

Currently, Chidambaram said that about 13 per cent of the increase in oil prices is being passed on the customers.

Purist economists would say that the entire increase should be passed on the consumers but that will cripple many segments of India's industry which use diesel, kerosene and cooking gas, he said.

Describing the current trend in oil prices as 'outrageous,' the Finance Minister said, "we have no control" on them. But they are dampening growth rates in developing countries and even in developed nations. This is one sector that has caused various problems.

Asked how much the oil prices would affect the economy, Chidambaram said a study had shown that every 10 dollar increase could bring down growth rate by 0.5 per cent in the US.

Stating that the Centre and States were observing strict fiscal discipline, Chidambaram discussed the goals set by India and the investment needed sector-by-sector and expressed Government's determination to fulfill them.

To a question about what government plans to do to attract NRI investments, the Minister said, "we have given everything to NRIs except vote." There is no restriction on their investment.

The forum was jointly organised by the Merrill Lynch and State Bank of India and attended by some 300 investors and corporate decision makers.

Those who interacted at various sessions with the investors included Chairman of the State Bank of India A. K. Purwar, Chairman of the Indian Securities and Exchange Board M. Damodaran, and CEO of Merrill Lynch Stan O' Neal.