THE OECD latest report has urged India to bring down FDI barriers and reduce regulatory uncertainties to woo more private investments. OECD has suggested various measures to boost India's growth saying there should be further reforms in the financial sector such as promoting entry of new private banks and establishing a plan to phase out priority lending and "regulatory uncertainty" should be reduced to promote more private sector investment.

Reforms to further promote the development of a dynamic and efficient financial sector are needed to support investment and growth though the government has eased some FDI barriers, allowing minority foreign ownership in the aviation sector and up to 51 per cent foreign ownership in multi-brand retail subject to restrictions such as approval by state governments and local procurement provisions.

On financial sector reforms, OECD said that bank portfolio restrictions should be relaxed, including a gradual reduction in share of government bonds held by banks and establishing a plan to phase out priority lending. Also, the government has to "allow greater participation by foreign investors in the financial services sector and promote the entry of new private banks".