Union Finance Minister to sell India's growth story on US visit

New Delhi: Finance Minister Pranab Mukherjee's two-day visit to Washington beginning Monday will be focused on reassuring foreign investors that India continues to be an attractive investment destination, as its medium and long-term growth story remains intact, officials say.

"The focus is on business. During the two-day stay, the finance minister will hold meetings with business honchos and top US economic policy makers," a finance ministry official, who didn't want to be quoted, told IANS.

Mukherjee is scheduled to hold roundtable meetings with chief executives of top US and Indian companies Tuesday. He will also address a luncheon meeting of the India-US CEO forum.

The finance minister will be accompanied by top officials, including his chief economic advisor Kaushik Basu, economic affairs secretary R. Gopalan and Reserve Bank of India Governor Duvvuri Subbaro.

Mukherjee's visit comes in the backdrop of a series of scams and corruption scandals, stubbornly high inflation, decline in industrial output growth and sharp decline in the flow of foreign direct investment. All these have raised a question mark on India's growth story.

"The current spate of corruption scandals has made a big dent on India's global image. It is negatively affecting the flow of foreign direct investment. Businesses are apprehensive," Rajeev Peshawaria, chief executive officer of Kuala Lumpur-based ICLIF Leadership and Governance Centre, told IANS.

Peshawaria said cleaning up its image and reassuring foreign investors on the growth story were among the major challenges facing Prime Minister Manmohan Singh's government.

"Definitely, India's time for growth has come. Everybody is looking at India as this is the place to invest in. But there are certain things that are holding them back," he said.

Foreign direct investment (FDI) in India declined 25.67 percent to $18.3 billion during the first 11 months of fiscal 2010-11 as compared to $24.62 billion during the corresponding period of the previous year.

Inflation has remained stubbornly high, near double-digit, during the last one and half years despite an aggressive monetary tightening by the Reserve Bank of India.

On the first day of his visit June 27, Mukherjee will address the India-US economic and financial partnership summit in Washington. The event is being organised by the Confederation of Indian Industry (CII) and the US-based Brookings Institution.

Mukherjee will also hold discussions with key US economic policy makers including Treasury Secretary Timothy Geithner, Federal Reserve Chairman Ben S. Bernanke and Securities and Exchange Commission Chairman Mary L. Schapiro.

(Gyanendra Kumar Keshri can be reached at gyanendra.k@ians.in)

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