India needs to take many policy measures over a period of time, including moving towards full capital account convertibility, to become a leading global economy, Minister of State for Finance Jayant Sinha has said.
“There are many policy measures and many things that we have to do over a period of time, if indeed India has to become a leading global economy… We have to make it possible for our capital markets to be broader, deeper and for that to happen, capital account convertibility also becomes important,” Sinha told reporters at an event here.
The Minister said that India has became more and more open in the last few years.
“Definitely, we have to play our rightful, responsible role in the global economy, we have to move in that direction (capital account convertibility),” Sinha said.
The Minister’s statement assumes significance as Reserve Bank (RBI) Governor Raghuram Rajan had recently said that the central bank is looking at allowing full capital account convertibility in a few years.
Stating that the RBI is fairly open to capital inflows, the Governor had said: “The only place today that we have some restrictions is inflows into debt, especially very short-term debt.”
Full capital convertibility means a foreign investor can repatriate his money into his own local currency at will, which is not allowed in the country as of now.
Finance Minister Arun Jaitley had also recently launched the country’s first international finance centre in Gujarat.
Full rupee convertibility can go a long way in the effective functioning this global financial services hub.