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We are not singling out any foreign capital: FM

india Updated: Feb 29, 2008 21:30 IST
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Government on Friday assured US investors it does not intend to single out any particular foreign capital while temporarily moderating such inflows.

"We have several kinds of inflows. We have FDI, we have remittances, we have tourist earnings, we have FIIs, we have private venture capital. We are not singling out anyone, we have not singled out anyone in the (Budget) speech," Finance Minister P Chidambaram said in an interaction through video-conferencing with US investors.

He said if foreign inflows were far in excess of current account deficit (CAD), some temporary measures have to be taken to moderate the inflows.

To a query as to why did the government not allow the rupee to fully appreciate, Chidambaram said capital inflows have to be absorbed by the economy, but in India they were far in excess of CAD.

In the meanwhile, large number of jobs depend on exports, he said, adding that "we cannot have large scale of retrenchments, lay off in manufacturing. Likewise, service sector is also very export oriented."

He said, "RBI, and not the government, decides what should be the extent of intervention. One form is sterilisation... I don't think what we have done is wrong and I think what we have done was right, given the Indian context and Indian needs."

In his Budget speech, the Finance Minister said,"In the short term, it is our responsibility to manage the flows more actively. Government will, in consultation with the RBI, continue to monitor the situation closely and take such temporary measures as may be necessary to moderate the capital flows, consistent with the objective of monetary and financial stability."