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The Cabinet would take up a proposal to increase the upper limit of foreign direct investment (FDI) in various sectors next month, said Finance Minister P Chidambaram. “FDI cap review may come up before the Cabinet in the third week of July,” he told reporters.
A committee headed by Economic Affairs Secretary Arvind Mayaram had recommended that the FDI limit be raised to 49 per cent in almost all sectors through the automatic route.
On the depreciation of the rupee, he said there was no need to panic and the Reserve Bank of India (RBI) would take action when necessary. “We are watching the situation; RBI will take whatever action it has to take. We have good economic advisors. We will (do) whatever has to be done.”
The rupee touched an all-time low of 59.98 in the intra- day trade today. RBI has reportedly intervened to check the slide.
The fall in currencies of emerging markets is being attributed to the statement by Federal Reserve Chairman Ben Bernanke that the US Fed may start scaling back its monetary stimulus programme. later this year.
According to Chidambaram, the statement of US Federal chief Ben Bernanke was misunderstood by the markets. "It is my view that just as Mr Bernanke's statement was misunderstood a month ago, yesterday's statement (too was) being misunderstood.”
