Funds from Japanese mkt not needed

Written by fe Bureau | New Delhi | Updated: Jun 27 2009, 05:50am hrs
There is no need to raise funds from the Japanese market since enough liquidity is available in the domestic market in India, Planning Commission deputy chairman Montek Singh Ahluwalia said on Friday.

Ahluwalias comments come in the backdrop of Japan offering India to raise up to 250 billion yen through bond issuance in the Tokyo market. FE had reported about Japans offer in its Friday edition. I am not aware of the Japan (offer), he said on the sidelines of the fourth global meeting of the Emerging Markets Forum, organised by Infrastructure Development Finance Company (IDFC) and supported by FE and the Bombay Chamber of Commerce.

However, he said the country did not need to borrow from the foreign market. There is enough liquidity available in India, he said.

The Japan Bank for International Cooperation has discussed the bond issue with the ministry of finance. But India is not keen to pursue this, officials said. They have discussed the bond proposal but we have no plan to pursue the bond issue, a senior official said.

Earlier, participating at a panel discussion at the Forum, Ahluwalia said implementing the goods and service tax (GST) would boost Indias growth. It will in fact be a major tax reform. GST has to roll out next year after political consensus, he said.

The government has scheduled to implement the GST from April 1, 2010. He also said the government wanted the private sector to grow but it did not intend to disband the public sector.

The governments view is that sell off shares (in state-owned companies) but retain 51%, he said. Speaking at another discussion at the Forum, Ishrat Husain, former governor at the National Bank of Pakistan, said India should change is its attitude towards neighbouring countries to enhance trade flows.

There could be growth triangles between north-east in India and Nepal, West Bengal and Bangladesh, Rajasthan and Sindh, Punjab in India and Punjab in Pakistan, Husain said.

According to a study carried out by State Bank of Pakistan, liberalising trade between India and Pakistan would boost trade flows by five times, with both countries benefiting equally, he added.