P Chidambaram hints at steps to arrest rupee decline and boost investor sentiment

In a bid to stem the fall of rupee and boost investor sentiment,Finance Minister P Chidambaram today said government will further liberalise the FDI policy and hinted at measures to check non-essential imports to tame the Current Account Deficit (CAD). Marking completion of one year after his return to Finance Ministry,he told a press conference that the government would take steps to ensure growth and encourage public sector undertakings to raise funds from overseas markets,besides relaxing ECB norms.

The government,Chidambaram said,is also considering steps to attract investments from sovereign wealth and pension funds and float NRI deposit scheme. He said the rupee must be stabilised and volatility must be reduced. Stressing on the need to revive investment,he exuded confidence that the economic growth rate in the current fiscal will improve to 5.5-6 per cent from 5 per cent a year ago. “The government is actively considering significant liberalising of the FDI policy which would further increase long term foreign investment. We will ask some public sector companies to raise funds abroad. We have also decided on some measures to attract loner term NRI funds”,the Minister said.

Asserting that government hopes to contain gold imports at a level well below last year’s figure of 845 tonnes,he said,”simultaneously we are looking at some compression in non-oil and non-gold imports,especially of non-essential goods”. Elaborating on compression on imports,Chidambaram said that officials were preparing a list of non-essential goods with a view to limit their inward shipments. Specifically mentioning coal and electronic hardware,he said,”Electronic hardware can be manufactured in states like Rajasthan and Kerala.”