The government is looking at raising the FII investment limit in debt, says finance secretary Ashok Chawla
India sees a minimal impact from the Greek debt crisis despite some likely capital outflows in the near term, top policymakers said on Monday, reports Reuters.
Finance secretary Ashok Chawla said he expects the Greek sovereign debt crisis to have a minimal impact on India, while one of Reserve Bank of India’s (RBI) deputy governors, Subir Gokarn, said there may not be any impact in the long-term.
"There might be some nervousness among investors worldwide, which might provoke capital outflows from emerging markets in the short run, so there is a risk of short-term vulnerability of capital outflows," Gokarn said in a separate event in Kolkata.
European Union finance ministers agreed an emergency loan package on Monday that with IMF support could reach 750 billion euros ($1 trillion) to prevent a sovereign debt crisis spreading through the euro zone.
When asked whether the government was planning to raise the FII investment cap in both government and corporate debt, currently at $5 billion and at $15 billion respectively, Chawla told reporters, "We are looking at that." The finance secretary also said he did not expect any change in the government's market borrowing plan in the first half of the current fiscal year that started on April 1.
The government is on track to borrow Rs2.87 trillion in the period through September. However, higher-than-expected proceeds from the third generation (3G) mobile spectrum auction has raised speculation that the government's borrowing in the first half of 2010/11 could be lower.