Our Bureau

New Delhi, Nov. 3

India has no immediate plans to place curbs on capital inflows, the Finance Minister, Mr Pranab Mukherjee, has said.

“I am not going to put any curb on the capital inflows right now”, Mr Mukherjee said setting at rest speculation over clamping capital controls. He was responding to a query at the Economic Editors’ Conference here on Tuesday.

There has been strong foreign investor interest in India since April 2009, especially on the stock market front with portfolio investments at to about $ 13.8 billion till mid-October. In the same period last year, there was net outflow from the stock market.

Brazil, another emerging economy, had last month slapped a 2 per cent tax on foreign investments into equities and fixed income instruments.

On the Reserve Bank of India’s move to purchase 200 tonnes of gold from the International Monetary Fund Mr Mukherjee said that the move did not reflect a preference for the metal over the dollar. “It does not signify either more confidence in gold or less confidence in dollar.” Mr Mukherjee pointed out that a good foreign exchange reserves position aided such a transaction.

“As the Finance Minister, my advice to the RBI Governor would be ‘if you are in a position, keeping in view the availability of foreign exchange, then you buy that’. In that perspective, it has been bought,” Mr Mukherjee said.

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