In order to reverse the fall of rupee against the dollar and finance the widening current account deficit (CAD), the newly-elected Assocham president and YES Bank chief Rana Kapoor today batted for global sovereign bonds and tapping of non-resident Indian (NRI) pools to the tune of $8-10 billion.
This comes close to the heels of the finance ministry statement that “all options, including a sovereign bond issue, are on the table and are examined from time to time,” that would help the country to attract more foreign money to finance widening CAD.
Kapoor also hoped that the interest rates would come down by the second half of the financial year.
“In my sense, we need to think what are these stop-gap measures by tapping NRI pools or even a sovereign bond which many countries have adopted. India’s overall debt paper is negligible, sovereign paper has not been issued. I would say definitely a sovereign or a combination of NRI bonds or NRI deposit scheme is much needed. As an interim measure, if we can raise $8-10 billion, it would be very good,” Kapoor told Business Standard, on the sidelines of an Assocham meet here. He added that when there is so much of global liquidity, investors would be keen and would tap this rare offering by India.
Seeking an investment-led revival of the economy, Assocham asked the government to use the “inactive money” of Rs 2.8 lakh crore lying with about 25 public sector undertakings to be utilized for investment purposes in a constructive way. “PSUs need to have a social commitment too. This would be one of our priorities to push these companies to invest in various sectors,” Kapoor added.
However, the Prime Minister Manmohan Singh had said at the very chamber's AGM that public sector has been investing money. "Public Sector investment has been fast-tracked and I have estimated that over Rs 120,000 crores has been invested by major Public Sector Units last year," he had said. End
