)
A top Finance Ministry official today met a host of foreign institutional investors (FIIs) to sell India's long-term growth potential and allay fears about the reforms process in the country in a bid to attract funds from overseas.
The reform process is irreversible and the government will continue financial sector reforms, Economic Affairs Secretary Arvind Mayaram told FIIs, according to sources.
Mayaram also told them about the macroeconomic situation in the country and assured them the fiscal deficit target for the current financial year would be met, the sources added.
Finance Minister P Chidambaram said last week the economy will pick up in the second half and record growth of 5-5.5% in 2013-14. He said the government will be able to contain the fiscal deficit at 4.8% of GDP and narrow the current account deficit to less than $56 billion.
FIIs have invested $17.1 billion in the stock market so far in 2013, according to data from the Securities and Exchange Board of India, the capital market regulator.
Top officials of FIIs including Alliance Bernstein, GLG Partners and Davidson Kempener attended the meeting today.
According to the sources, pension funds including a Canadian pension fund showed interest in long-term investment.
Mayaram also spoke about Real Estate Investment Trusts and the Infrastructure Investment Fund as avenues to park their funds.
According to sources, more steps could be taken to improve inflows, such as greater participation for FIIs in the currency derivative market, easy conditions for collateral and modification in FEMA rules.
Most of the proposed measures would not require changes in legislation, sources said.
FIIs may also be allowed to use domestic securities as collateral.
FIIs reportedly sought the removal of short-term capital gains tax.
