No room for pessimism, govt moving ahead with reforms: P. Chidambaram

Written by ENS Economic Bureau | New Delhi | Updated: Jun 26 2013, 14:31pm hrs
P chidambaramFinance minister P Chidambaram. (Reuters)
Finance minister P Chidambaram on Tuesday once again asked investors not to be overly pessimistic about the falling value of the rupee and promised more reforms in the coming weeks that would help revive capital inflows into the country.

Among the large emerging economies, we are the fastest growing economies next only to China and therefore I am confident that money will flow back into India. Investors will find India a safe destination to invest. And this temporary phase should pass. There is no need for pessimism, he said on the sidelines of a Crisil function.

The Indian currency touched a record low of 59.98 to a dollar last week following US Federal Reserve chairman Ben Bernankes statement that the US government could slowdown purchase of bonds, depending on economic condition, later this year.

But re-iterating that the statement by Bernanke was completely misunderstood, Chidambaram further said, The rupee is very stable. A large amount of money flowed into India. Between January and May alone, I think a little over $5 billion flowed into India. (But) following Bernankes statement, $5 billion flowed out of India in a matter of two weeks. This is unfortunate.

He also announced that the government will take a call on revising the FDI caps in different sectors in the second or third week of July. A panel led by economic affairs secretary Arvind Mayaram had last week submitted a report calling for a comprehensive overhaul in the foreign investment regime. Besides, other crucial decisions are also expected to be taken in the coming days, the finance minister indicated.