Investment Commission sets $ 15 billion FDI target by 2007-08, wants 49 percent FDI in retail

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The Commission has also pitched for promoting special economic zones (SEZs) in areas like auto components, textiles, electronics and chemicals.

It has also mooted a level-playing field in sectors where public sector dominates and creating a special high-level fast track mechanism for priority sector projects.

The Commission, which has submitted its report to Finance Minister P. Chidambaram, also said achieving a sustained GDP growth of over 8 percent would require over $ 1.5 trillion capital investment over the next five years, across public and private sectors.

By 2009-10, the annual domestic investment required would be $ 350 billion, while the FDI required would be $ 20 billion.

Chidambaram said India needed stable policies and strong economic fundamentals to attract foreign investment and was on the "right path."

The 99-page report, submitted by the Commission, has recommended that the FDI in retail could be 49 percent initially, and increased subsequently.

It has also said the 100 percent FDI allowed in wholesale cash and carry should be allowed on the automatic route. It has said there should be no restriction on scale and operation.

The only sector which the commission has not favoured opening up of is legal service which it said should be subject to WTO negotiations in services.

The report has called for an increase in FDI to 100 percent from 74 percent in private banks and 49 percent in public sector banks at present. The 49 percent FDI in PSU banks will be inclusive of both FII and FDI.

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