A senior finance ministry official said on Saturday that India would not bend backwards to be included in global bond indices.
Publishing a mathematical analogy, Finance Minister T.V. Somanathan said that pointers are an exclusive club or gym, which insists entry only to those who wear ties.
Speaking of post-budget interaction with industry players in the financial capital, he said: “…if we enter this club, it will be through dhoti and saree. We will not change our domestic policies to suit foreign investors.”
He said there were pros and cons to such a listing, which had been talked about in the previous budget announcement, and that India would not “bend backwards” to enter.
He said India’s policies would be based on domestic requirements, and there would be no change of stance to suit the whim of global bond investors.
He said that global indicators should only allow entry into India if such a situation was acceptable to them.
Somanathan said that the positives of entry include higher inflows of funds, but the same thing also exposes us to risks of volatility and withdrawal due to non-domestic factors, referring to the experience of “destabilization” in some East Asian economies.
Ajay Seth, Minister of Economic Affairs, hinted that there is no immediate plan to join the indices.
“Right now, there is a lot of uncertainty globally in terms of the exchange rate, interest rate, etc. This is not the time to hit the pedal in this aspect.
“When the global markets are a little more consistent, then that piece will have to be picked up again,” he said.
(Only the title and image for this report may have been reworked by the Business Standard team; the rest of the content is generated automatically from a shared feed.)
