 "No plan to raise FII G-sec limit, no SUUTI stake sale for now")
The limits for foreign institutional investment (FIIs) in government bonds are not likely to be raised for the present, as inflows into the economy remain strong, Finance Secretary Rajiv Mehrishi said on Wednesday.
“We have enough foreign fund flows. That is why there is no urgency to raise the limit," he told reporters after a meeting between Finance Minister Arun Jaitley and Reserve Bank of India Governor Raghuram Rajan here.
The government allows foreign investors to invest a maximum of $30 billion in government debt. Of this, $5 bn is for long-term investors. The investment by foreign funds in government bonds was 99.92 per cent of the $25 bn limit and 100 per cent for the $5 bn limit as of Tuesday, showed data from National Securities Depository Ltd.
Mehrishi said there was no proposal to dilute the government's stake stake in listed companies held through SUUTI “immediately”. Specified Undertaking of UTI (SUUTI), formed in 2003, is an offshoot of the erstwhile UTI, through which the government owns an 11.27 per cent stake in ITC, 8.18 per cent in Larsen & Toubro and 11.66 per cent in Axis Bank.
Selling part of those stakes to raise about Rs 6,500 crore was in the 2014-15 Budget plan but, as reported in Business Standard earlier, had been scrapped. In the 2015-16 document, a possible SUUTI sale did not figure in the budgeted capital receipts but was mentioned as part of the Rs 28,500-crore strategic sale target.
Talking to reporters after the meeting, Governor Rajan said he’d asked banks to restructure the loans of farmers affected by the unseasonal rain and hail. The initial estimates, “indicate that as much as 17 per cent of the sown area under the rabi crop might have been affected”.
“We have enough foreign fund flows. That is why there is no urgency to raise the limit," he told reporters after a meeting between Finance Minister Arun Jaitley and Reserve Bank of India Governor Raghuram Rajan here.
The government allows foreign investors to invest a maximum of $30 billion in government debt. Of this, $5 bn is for long-term investors. The investment by foreign funds in government bonds was 99.92 per cent of the $25 bn limit and 100 per cent for the $5 bn limit as of Tuesday, showed data from National Securities Depository Ltd.
Also Read
Rajan met Jaitley after attending the launch of Micro Units Development Refinance Agency (MUDRA) Bank and is believed to have discussed the economic situation and the new monetary policy framework. Beside Jaitley and Mehrishi , he also met Minister of State for Finance Jayant Sinha and other senior functionaries in the ministry.
Mehrishi said there was no proposal to dilute the government's stake stake in listed companies held through SUUTI “immediately”. Specified Undertaking of UTI (SUUTI), formed in 2003, is an offshoot of the erstwhile UTI, through which the government owns an 11.27 per cent stake in ITC, 8.18 per cent in Larsen & Toubro and 11.66 per cent in Axis Bank.
Selling part of those stakes to raise about Rs 6,500 crore was in the 2014-15 Budget plan but, as reported in Business Standard earlier, had been scrapped. In the 2015-16 document, a possible SUUTI sale did not figure in the budgeted capital receipts but was mentioned as part of the Rs 28,500-crore strategic sale target.
Talking to reporters after the meeting, Governor Rajan said he’d asked banks to restructure the loans of farmers affected by the unseasonal rain and hail. The initial estimates, “indicate that as much as 17 per cent of the sown area under the rabi crop might have been affected”.