The Reserve Bank is considering setting up a panel to study the slowdown in foreign direct investment (FDI) in the country,a top bank official said today. "The RBI is likely to set up a panel to study the issue and will come out with a report," Reserve Bank of India Deputy Governor,K C Chakrabarty,told reporters on the sidelines of an event here. Chakrabarty added the report was to understand why FDI was slowing down and what should be done about it. "If we know why it is slowing down then may be we will get some clue. If a research paper is available then the concerned people may take some corrective measures," he said. The panel will be an internal RBI one,he said. Chakrabarty's comments follow RBI Governor D Subbarao's comments who said that apex bank was working on plans to form a panel to study the slowdown in foreign direct investment. Subbarao said that the panel would suggest ways to encourage FDI. India received less foreign direct investment in 2010 than the previous year,courtesy a modest recovery in the global economy which reduced the risk and expansion appetite of corporates across the world. Besides,the central bank also blamed procedural delays in allocation of land and environmental clearance among a range of domestic concerns affecting the FDI sentiment. During the April-November 2010 period,FDI fell to USD 19-billion from over USD 25-billion in the corresponding period of the previous year. Besides,Chakrabarty added said that inflation created a difficult situation for achieving higher economic growth but was "still manageable and required a balancing act." "We must understand that ultimately if inflation is not controlled,we can't sustain high growth," Chakrabarty said. Food inflation eased in late January to just over 13 per cent after having reached a one-year high of more than 18 per cent on December 25,due to soaring onion,tomato and garlic prices.
