Is the Economic Survey overestimating reserves adequacy?

There is some concern in the finance ministry about the adequacy of foreign exchange reserves in case there is an unanticipated and large withdrawal of dollars.

It’s interesting that this year’s Economic Survey, presented yesterday, has devoted a few paragraphs to the sustainability of foreign exchange reserves even though no one else is talking about it just yet.

This suggests that there is some concern in the finance ministry about the adequacy of reserves in case there is an unanticipated and large withdrawal of dollars.

I remember the government catch phrase then: there is cause for concern but not for panic. This year’s Survey reminds me of that.

A report in this newspaper says, “India’s salient external sector sustainability indicators are strong and much improved as compared to what