Chief Economic Advisor Krishnamurthy Subramanian on Tuesday said that there is no problem in raising funds overseas, provided the issuance of the sovereign is well-managed.
Chief Economic Advisor Krishnamurthy Subramanian on Tuesday said that there is no problem in raising funds overseas, provided the issuance of the sovereign is well-managed, TV news channel CNBC TV-18 reported. The government will factor in all ‘risks and returns’ to raise funds through sovereign bonds and possibly the issuance would in the second half of the current financial year, global news agency Reuters reported citing Chief Economic Adviser Krishnamurthy Subramanian as speaking at an event in Delhi. It’s the right time for India to raise funds through overseas market, CEA also said, adding that tapping into foreign savings to nudge domestic savings.
In the full-budget for 2019-20, Finance Minister Nirmala Sitharaman had announced that the government would raise a part of its gross borrowing requirement from overseas markets in foreign currencies. Since the sovereign external debt-to-GDP ratio is among the lowest globally for India, less than 5 per cent, the country can look forward to raise funds from external markets, she had also said in the budget speech. The government would soon begin with the process of raising funds from the foreign markets by issuing sovereign bonds in the second half of the ongoing fiscal, news agency PTI reported citing Finance Secretary Subhash Chandra Garg.
The adviser will help the government in deciding the maximum amount of funds that can be raised in the foreign currency, he said. “We will try to do the first issue within this fiscal… My sense is at the time of second half calender towards last week of September if we are in position to provide the roadmap, we should be providing that,” he told PTI.
After the announcement, various experts and economists had said that even as the issuance of the sovereign bonds is a welcome step, the government needs to properly look into the currency rate risk.