No Need To Further Act On Gold Imports

The Indian government does not need to act as of now to further moderate gold imports as recent steps have already had considerable impact, economic affairs secretary Arvind Mayaram said in the sidelines of an investor conference.

 

The government has recently raised import duties on gold to 8 per cent and the central bank has put curbs on gold financing by banks to put a brake on gold imports, which have been a key reason for India's wide current account deficit.

 

Mayaram also said the government was looking at issuing an overseas bond to raise capital for infrastructure. His comments come after the finance ministry's economic adviser Raghuram Rajan said on Tuesday India was considering raising funds through debt targeted at non-resident Indians. 

 

Worried over rupee sliding to historic low of 58.96 against dollar, Finance Ministry said it is working on steps to increase foreign investment inflows and is open to the idea of floating NRI bonds.

 

Seeking to assuage market sentiments, Mayaram had earlier on 11 June said the government was "not unduly disturbed" by steep fall in rupee. He also exuded confidence that the domestic currency will stabilise in the next 3-4 days with expected big foreign fund flows.

 

Without ruling out the possibility of NRI bonds to raise foreign funds, Chief Economic Advisor Raghuram Rajan said government is "looking at all options" and will take steps to increase portfolio and foreign direct investment (FDI).

 

"We will continue to implement measures to ensure that portfolio investor inflows are enabled and encouraged, and some of these measures will be announced very shortly. In the coming weeks, we will recommend to the Cabinet policies to enhance FDI limits on a number of areas," Rajan said.

 

The rupee has depreciated by 3.5 per cent against the US dollar in the last two days touching all-time low of 58.96 in intra-day trade today. RBI intervened in forex market to stem the slide of rupee which finally closed at 58.39 a dollar. Since 1 January, the rupee value has fallen by 5.5 per cent against the dollar.

 

Rajan further said government, Reserve Bank and Sebi would step in at appropriate time to curb volatility in financial markets.

Government has been looking at the possibility of raising FDI cap in sectors, including defence, and it has already set up a committee to review the ceiling in other areas.

 

Currently, there are sectors where FDI limit is way below 100 per cent. While in multi-brand retail it is 51 per cent, in telecom and banking it is 74 per cent, and in defence it is 26 per cent.

 

No Need To Further Act On Gold Imports

The Indian government does not need to act as of now to further moderate gold imports as recent steps have already had considerable impact, Mayaram said in the sidelines of an investor conference.

 

The government has recently raised import duties on gold to 8 per cent and the central bank has put curbs on gold financing by banks to put a brake on gold imports, which have been a key reason for India's wide current account deficit.

 

Mayaram also said the government was looking at issuing an overseas bond to raise capital for infrastructure. His comments come after the finance ministry's economic adviser Raghuram Rajan said on Tuesday India was considering raising funds through debt targeted at non-resident Indians. 

 

(Agencies)