Government to further liberalise FDI policy, says Chidambaram New Delhi: Faced with sliding rupee, Finance Minister P. Chidambaram today said the government will further liberalise the foreign direct investment (FDI) policy and encourage public sector undertakings to raise funds from overseas markets. Addressing the media on the completion of one year as the Finance Minister, he exuded confidence that the economy would record a growth rate of 5.5 to 6 per cent in the current financial year, up from 5 per cent a year ago. Mr. Chidambaram, who took charge of the ministry on August 1 last year, said the government was also looking at raising the import duty on non-essential luxury items and promoting exports to contain current account deficit (CAD), which had soared to a high of 4.8 per cent of the GDP in the last fiscal. "We are looking at some compression in non-oil and non-gold import to curb demand for non-essential luxury items," he said. The other steps being considered by the government to deal with the current account deficit include relaxing the external commercial borrowing (ECB) norms, attracting investments from sovereign wealth and pension funds and NRI deposits. Replying to questions on rupee, the minister said though he did not have a fixed target in mind but he would endeavour to check volatility and end speculative trades on the domestic currency. The rupee slipped to the near the record low level of 61.21 to the dollar in early trade today, but later recovered to close at 60.40 to the dollar. On the possibility of a sovereign bond issue to raise forex, he said: "That is an option on the table but I will not rush into any decision." The government recently relaxed the FDI policy raising the caps in several sectors and permitting foreign investment in many others under the automatic route.
Posted on: Thu, 08 Aug 2013 16:15:48 +0000
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