NEW DELHI: Amid the government looking to improve investment climate, Law Minister Salman Khurshid today hinted at more measures to boost confidence of investors in the Indian market.
“I think next (coming) months you will see much greater determination in flagging and performing on those specific elements that will give more confidence to the markets…and to the people who want to invest in our country,” Khurshid said at World Islamic Economic Forum here.
Last month, the RBI in consultation with the government had increased FII limit in G-Secs to USD 20 billion, while allowing up to USD 10 billion from overseas borrowings by India Inc for refinancing rupee loans.
Long-term investors like Sovereign Wealth Funds (SWFs), multilateral agencies, endowment funds, insurance funds, pension funds and foreign central banks would be allowed to invest in government debts up to USD 20 billion, RBI had said in a notification.
The move was aimed attracting bigger capital inflows into the country.
Also, the terms and conditions for the scheme for FII investment in infrastructure debt and the scheme for non- resident investment in Infrastructure Development Funds (IDFs) have been further rationalised in terms of lock-in period and residual maturity.
Further, the conditions for investment by individual foreign investors have been relaxed in Mutual Funds.
Prime Minister Manmohan Singh while reviewing the economy last month had said “reverse the climate of pessimism…revive the animal spirit in the country’s economy.”
“Immediate emphasis is to manage, balance of payment for which all policies should be directed to help in institutional flows to India,” Singh had said adding “in the short run, we need to revive investor sentiment, both domestic and international”.
Expressing optimism in the Indian economy, Khurshid “we till last year had very high investment. We are still the second fastest growing economy.”
On Islamic banking, he said, this is difficult to fit in with the existing regulation.
“Sooner or later the Reserve Bank will look at it (Islamic banking) afresh and then come out with the final view,” he said.
This article was published at The Economic Times website on 4th July 2012.
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