Indo-Pak war clouds scared foreign investors, admits Sinha

The war like situation between India and Pakistan has made a negative impact on foreign investors, Indian Finance Minister Yashwant Sinha has admitted.

Sinha expressed displeasure at travel advisories by countries like the US, Britain and France, asking their nationals to leave in the wake of border tension.

"It is indeed bad. The foreign countries should take back the advice to their citizens to leave India," said Sinha.

"Foreign investors are shying away from investing in India considering the uncertainty prevailing due to the war like situation."

He ruled out taking new fiscal measures to mop up resources to meet defence expenses. "We had already made the necessary provisions in the budget."

He also said there was no chance of India withdrawing security forces from border areas unless Pakistan stopped infiltration completely.

"There are indications that the infiltration has been reduced to some extent. This is a good development."

"We are keeping a close eye on developments. Unless complete peace prevails in bordering areas, we cannot afford to withdraw our forces," Sinha said.

The Finance Minister also gave hope to the millions of investors of US 64, a flagship scheme of India's largest fund manager Unit Trust of India, which virtually collapsed last year due to mismanagement.

"At least the principal amount deposited with the UTI will be refunded to investors. But this process will start not before 2003," Sinha said.

Ranchi, June 24 , 2002 (HT)