India to further open up flagging economy

NEW DELHI: India's government is likely to allow greater overseas investment, sell stakes in state-run companies and inject more capital into lenders to revive an economy growing at the slowest pace since 2003, its president said.

"Foreign direct investment needs to be encouraged through an appropriate policy regime," President Pratibha Devisingh Patil said. "There is also a need to augment resources in the banking and the insurance sector. Toward this end, my government will recapitalize the public-sector banks to strengthen their financial position."

The government will also develop a roadmap for selling stakes in state-run companies, she said in New Delhi yesterday as she unveiled Prime Minister Manmohan Singh's plans in a presentation to a joint session of parliament.