India’s Finance Minister Vows Not To Overspend
In the insurance sector, the government proposes to increase the FDI cap to 49 per cent from 26 per cent, which the BJP opposes. The main opposition party is also against raising the FDI limit in the pension sector to 49 per cent. During the session, the BJP is expected to raise the issue of government further easing FDI norms in various sectors and press for detailed debates on the matter. The government earlier this week decided to raise FDI caps in sectors such as telecom (from 74 per cent 100 per cent), power exchanges, petroleum and natural gas sector and courier services, besides easing sourcing and investment norms for multi-brand retailing. Swaraj, Leader of Opposition in the Lok Sabha, has demanded a debate on the current economic situation in the backdrop of the declining rupee, rising prices and slowing GDP growth.
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(Image credit: AFP/Getty Images via @daylife) Indias Finance Minister Palaniappan Chidambaram said despite the tough outlook for government finances, and an election coming up, New Delhi has no plans to overspend to win the hearts and minds of the electorate. On Thursday, the Economic Times reported on a Chidambaram presser on the first anniversary of his role as the countrys finance ministry where he said that state-run companies would be encouraged to raise funds overseas in new bond issues. He also said that the foreign direct investment policy would be liberalized beyond just big box retail and airlines currently as the government tries desperately to bring in money from abroad. Meanwhile, the FinMin did the usual cheerleading, saying he was confident the government could finance the current account deficit now nearly 5% this year without pulling money out of Indias foreign cash reserves.