The government will move fast towards a more liberal forex regime in the backdrop of a record foreign exchange reserves of 68 billion dollar and fresh inflow of $500 million a week, Finance Minister Jaswant Singh said on Tuesday.
"A viewpoint has emerged that with almost $68 billion foreign exchange and the kind of rate of inflow, we have to look into the total question of the management of reserves," Singh said in reply to a question on the balance of payment surplus in the Rajya Sabha.
Besides having a comfortable reserves, India is receiving a weekly inflow of $500 million, necessitating a relook at the foreign exchange regime, the finance minister said, answering a supplementary whether the reserves are getting too big to manage.
The Reserve Bank of India, on advice from the government, is already addressing itself to this question, Singh said.
The finance minister said that the country could manage its foreign exchange situation pretty comfortably for two and half years, irrespective of any international development.
The Reserve Bank of India has already announced several liberalised measures for the citizens in regard to the foreign exchange rules.
The citizens can have forex current account in India for managing their expenditure for import of gifts or books, etc.
The forex allowance has also been enhanced to $20,000 a year, excluding the limit on their credit card. They can also retain their earnings abroad.
Singh indicated that the regime could be further relaxed in the backdrop of encouraging inflows.
India recorded a surplus in the current account of balance of payment of $1.351 billion in 2001-02, for the first time after 1977-78.
In the current financial year, the current account surplus has amounted to $325 million in the first quarter of April-June 2002.
"These developments reflects the success of the policies for management of the external sector of the economy, which amongst others include encouraging our exports and invisibles and maintaining a stable exchange rate of the rupee. These policies will be pursued further," Singh said.
The finance minister said that the Securities and Exchange Board of India has directed the major two depositories to reconcile the dematted shares with them within a period of one month.
He admitted that there was an overlap in the functions of Sebi and the Department of Company Affairs. That is why the finance ministry will soon come out with a legislation to set up a Serious Fraud Office.
UNI