FDI May Fall Short Of Target: Survey - June 25, 2008

Global economic slowdown and spiralling inflation caused by increasing oil prices may adversely impact realisation of the foreign direct investment (FDI) target of $35 billion in the current fiscal.This is the realistic assessment of FDI inflows by of 400 CEOs who felt that the FDI target is likely to fall short by $7-8 billion. They were taking part in a survey conducted by Associated Chambers of Commerce and Industry of India (Assocham).

Adverse sentiment in the stock markets, bottlenecks on infrastructure investments, government''s inability to sign nuclear deal are some of other reasons due to which the FDI target may fall short, the survey said. The chamber has asked the government to take sufficient measures to mount pressure from various bilateral and multilateral agencies on oil producing countries to increase oil production. In fact, recently Finance Minister P. Chidambaram has appealed the oil producing countries to increase its supply to control prices. He had advocated for a price band mechanism for crude oil for producers and consumers to find a common ground. The government had set a target of $30 billion in the last fiscal, but it received about $25 billion FDIs.

India To Have 1mn New Jobs In 2008: Survey

The hospitality, health and education sectors are likely to replace the IT/ITeS sector as leading job creators in the country, which will have over 10 lakh new work opportunities in 2008. India will add 10,25,800 jobs, a tad lower than 10,30,000 jobs in 2007, predicted the Ma Foi Employment Survey 2008 released here. The traditional job creating horses like IT and IteS sectors have been replaced by hospitality, health and education sector, Ma Foi Management Consultants Managing Director K Pandia Rajan said while releasing the survey. Ma Foi is the largest human resource service provider and staffing company in India. It has been conducting the employment survey since 2004. The 2008 survey was carried among 2006 companies from 22 sectors of the economy and is claimed to be the largest study on the organised sector. The hospitality sector is shown to generate the maximum number of employment in 2008 with over 4.26 lakh jobs.

An estimated USD 11.41 billion is expected to be seen in the hospitality sector in the next two years. India is likely to have around 40 international hotel brands by 2011,the survey highlighted. The health sector is expected to create over 2.95 lakh jobs led by a strong presence of private players and rising opportunities in medical tourism and telemedicine. The education sector, including training and consultancy, is expected to add 1.66 lakh employees. The survey found that manufacturing sectors of food products and beverages, furniture, mineral and metal products and mining will witness a constraint in hiring this year. Education tops the list of sectors generating the highest number of jobs in 2008 at 10,429,312, followed by hospitality at 6,595,879 and health at 3,616,525 jobs, the survey said.

Sustaining 9 P.C. Growth Will Be Tough: Survey

New Delhi: Holding out a warning that the current slowdown in the U.S. would have an effect on the Indian economy, the Economic Survey 2007-08 maintained that sustaining a high GDP growth of nine per cent while reining in inflation would be a tough challenge.

Tabled in Parliament by Finance Minister P. Chidambaram on Feb 27, the Government''s pre-Budget annual economic progress report said that in the current uncertain scenario, an increase in the overall growth to double digits would entail additional reforms and came out with a policy prescription. Among the various measures suggested to sustain the high growth momentum, the Survey favoured partial sale of the identified profit-making non-navaratna public sector undertakings (PSUs), phasing out control on sugar, fertilizer and drugs, sale of old oilfields to the private sector, a higher share for foreign equity in retail trade and further opening up of the banking and insurance sectors to foreign direct investment (FDI).

With the economy projected to grow at 8.7 per cent during the current fiscal, the Survey pointed out that the lower growth represented a deceleration from the unexpectedly high growth of 9.4 and 9.6 per cent in the preceding two years. Maintaining growth rate at nine per cent will be a challenge and raising it to two digits will be an even greater one, the Survey said.

Linking the huge accumulation of foreign capital inflows as the reason for the pressure building up on prices, the Survey said that inflationary impulses from global commodity prices must be tackled through use of fiscal and trade policy instruments. Inflation this fiscal is projected to return to the earlier level of 4.4 per cent, down from 5.4 per cent in 2006-07.