India said Friday it is seeking ways to boost foreign investment needed to fund a US$1 trillion plan to overhaul its dilapidated infrastructure -- seen as vital to boosting economic growth.

"Discussions are under way to liberalise foreign direct investment policy," Pranab Mukherjee told an international financial conference, without elaborating.

Foreign direct investment in India has dropped sharply recently amid concerns over corruption, bureaucracy, rising inflation and perceived government resistance to opening up the economy.

In 2010, foreign direct investment (FDI) slid 32 percent from a year earlier to
US$24 billion, according to UN figures, even as New Delhi encouraged foreigners to put money into domestic projects, particularly road building.

The decline, if it continues, spells bad news for the country, which the central bank recently said "needs a quantum step" in investment to propel economic growth to the double-digit levels needed to reduce massive poverty.

Mukherjee said India was on track to achieve nine percent growth next year, up from 8.6 percent this year but many economists are sceptical about the target, saying aggressive monetary tightening to rein in high inflation could slow expansion.

Mukherjee has said government is committed to trimming its fiscal deficit to 4.6 percent in the coming fiscal year starting April 1 from 5.1 percent this year and that India aimed to reduce its market borrowings.

channelnewsasia.com