Admitting that infrastructural bottlenecks were deterring foreign investment, the finance ministry on Wednesday said FDI inflow declined by 24 per cent to $4.66 billion last fiscal.

Despite revising the FDI definition, India is still far behind China in attracting investments, chief economic advisor Ashok Lahiri told reporters.

"We have to improve the investment climate. The main constraint is both physical and social infrastructure, which came in the way of not only FDI but also domestic investment," he said.

However, the FDI flows have started improving lately, reflecting signs of industrial recovery and better investor sentiments. "You will see action (more FDI inflows) in coming months. Already there are signs of it," he said.

The finance ministry revised the definition of FDI incorporating 14 items like equity capital, reinvested earnings and other capitals, to align it with best international practices so that the inflows become comparable with other nations.

FDI inflow was at $4.66 billion in 2002-03 under the revised norm compared to $6.131 billion in 2001-02 and $4.029 billion in 2000-01.

Under the previous definition, the FDI inflow was at $2.574 billion last fiscal compared to $3.905 billion in 2001-02 and $2.342 billion in 2000-01.