India can absorb foreign flows; gradual move on capital account
New Delhi, Nov 4 : Stating that global financial flows have started reviving, Planning Commission Deputy Chairman Montek Singh Ahluwalia today said their entry into India was welcome as the Indian economy has the capacity to absorb them.
Speaking at the Economic Editors' Conference here, Dr Ahluwalia said not only investment in brick and mortar was welcome, but so was foreign portfolio investments.
''We can absorb these foreign investment flows,'' he quipped.
Dr Ahluwalia went on to explain as to why despite welcoming foreign investment, India was slow to move in liberalising the capital account.
He said short term capital flows and additional external debt flows are extremely volatile in nature. This was universal experience and thus India will open up the capital account only gradually.
--UNI
(c) 2009 Published with permission from
United News of India.
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