Indeed, an unstated premise of the plan was that the likely shortfall in domestic private investment would be made good by FDI; likewise, a slack in public investment in, say, infrastructure would be taken up by FDI. This is why the Ninth Plan did not reckon with a slowdown in aggregate investment which resulted in recession after 1995-96.

To date, if Pepsi and Coca Cola are kept out of reckoning, FDI has not made its presence felt. The `chips not potato chips' slogan reflected the assumption that foreign investors were jostling to come in. This has turned out to be wishful thinking. The actual FDI inflow has been dismally small.

Even so, the belief persists that India enjoys high interest amongforeign direct investors; the AT Kearney FDI Confidence Index, which ranks India sixth, is considered a big deal. But the point is that China ranks second, after the US, and ahead of UK. Not every foreign investor in China makes money; and it is a difficult country compared with India.

But along with high confidence China gets mega FDI; with its sixth rank, India attracts less FDI than Poland. One reason why China is jumps ahead is that it is clear that it needs FDI; Chinese bureaucrats sweet talk investors unlike their abrasive Indian counterpart. Besides, approvals in this country are multilayered and the states are a hard nut to crack. More fundamentally, India is still not clear about the magnitude of FDI it needs to fulfil its annual investment requirement; for it FDI need be no more than marginal.

But it will be a while before domestic private investment emerges as the engine of competitive growth. This is not to fault domestic corporates who for decades were leashed in by industrial licensing andhigh taxes because the commanding heights were assigned to the public sector. Many industrial enterprises have taken a battering in the wake delicensing and import liberalisation. As a result, they have become more focussed. But it will take the Indian private sector time to assert.

One noticeable change among Indian big business is that they no longer clamour for swadeshi. This could be because the myth of the 200 million market has been bust. There is excess capacity in several industries. So FDI will necessarily be selective and, as of now, its interest is focussed on infrastructure where the problem is administered tariffs. Getting in a commercially viable pattern of user charges is difficult. This is slowing down FDI.