AP still favourite for foreign investors: ASSOCHAM

Hyderabad, August 27 (INN): With about 19 per cent share in the total foreign direct investment (FDI) proposed in 2011-12, Andhra Pradesh has emerged as the second most favorite investment destination for overseas investors across India, apex industry body ASSOCHAM said on Monday.

With FDI proposals worth about Rs 33,936 crore, about 70 FDI proposals were filed by the foreign investors in Andhra Pradesh, according to a state-wise analysis of the proposed FDI and the number of FDI proposals filed in India during 2011-12 carried out by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

With over 27 per cent share in the total foreign direct investment (FDI) proposed in 2011-12, Odisha has emerged as the most favorite investment destination for overseas investors across India.

Though, barely 17 FDI proposals were filed in Odisha, the state garnered lion's share worth about Rs 49,527 crore in the total FDI proposed across India, according to the ASSOCHAM analysis.

'A total of 763 FDI proposals worth over Rs 1.78 lakh crore were filed across various states in India during the aforesaid period,' said Ravi Sannareddy, chairperson of the ASSOCHAM Southern Regional Council while releasing the findings of the chamber's analysis.

'Services, telecommunications, construction, computers (software and hardware), real estate and housing, chemicals, drugs and pharmaceuticals, power, automobiles and metallurgical industries are certain sectors attracting highest FDI inflows across India,' said Sannareddy.

Gujarat got the second highest number of 131 FDI proposals and the state ranked third with a share of over 11 per cent attracting proposed investment worth Rs 20,258 crore, highlights the ASSOCHAM analysis.

Chattisgarh and Karnataka ranked fourth and fifth of the top five investment destinations from the foreign investors' point of view and got FDI proposals worth over Rs 20,000 crore and 14,000 crore respectively.

Maharashtra though got the highest number of FDI proposals of 144 but the state ranked sixth with proposed FDI worth over Rs 12,000 crore.

Of the top twenty states, West Bengal ranked 14th only above states like Bihar, Uttarakhand, Jharkhand, Jammu and Kashmir, Assam and Kerala and managed 24 FDI proposals worth a meager Rs 1,243 crore, according to the ASSOCHAM study.

Rajasthan, Tamil Nadu, Himachal Pradesh, Uttar Pradesh, Haryana, Madhya Pradesh and Punjab stayed ahead of West Bengal and attracted FDI proposals worth between Rs 8,600 crore and Rs 1,200 crore during the FY' 11-12.

India is competing for foreign investments with other emerging economies and thus FDI is imperative for India considering that it has completely transformed the quality, productivity and production in areas it has been allowed and can supplement domestic efforts significantly, according to an ASSOCHAM study titled 'India's Experience with FDI: Role of a Game Changer.'

Bureaucratic delays and process vis-'-vis plethora of governmental approvals and clearances involving various ministries must be fastened to increase the absorption of FDI in India, suggests the ASSOCHAM study.

ASSOCHAM has also recommended the government to devise a mechanism to facilitate a consultation between the centre and state governments before rolling out a policy to ensure that the decision once taken does not get affected.

"Restrictions on sector caps and entry route to sectors other than those of national importance must be liberalized further and constant reviewing of policies must be done,' said DS Rawat, national secretary general of ASSOCHAM.

'Besides, the government must ensure consistency of policy so as to perk up the business and investor confidence,' said Rawat. Government must recognize that good regulations and efficient processes are key catalysts for FDI.

Accessible and reliable information and efficient and predictable actions by public institutions help create a business environment conducive to investment.

ASSOCHAM has also called for a time-bound, non-discretionary, simplified and less number of procedures and approvals to help uplift the overseas investors' confidence and foster more investments in India.