The government will soon start using foreign exchange reserves for setting the country's creaking infrastructure right by creating a company for the purpose within the next three months.

"We will set up in the next 2-3 months, the Special Purpose Vehicle that I had promised," Finance Minister P Chidambaram said in an interview to CNBC-TV18 on Friday.

The SPV will borrow forex reserves from RBI and co-finance external commercial borrowings (ECBs) for import of machinery by Indian firms, he said.

India is sitting on a huge forex reserve of more than $200 billion, one of the largest in Asia, and the debate on using this fund for improving infrastructure has been going on for quite some time. The government has pegged the country's infrastructure investment requirements at $320 billion in the next few years.

Chidambaram disagreed with a view that using this reserve for core sector projects would fuel inflation, saying it would be spent outside India for buying capital goods.

Foreign reserves if spent outside the country, he said, would not lead to inflation. Moreover, companies were already allowed to invest up to three times of their net worth abroad.

On capital account convertibility, he said developed economies have achieved full currency float and India should also learn to manage 'fully or near fully convertible capital account.'

On agriculture, he said consumers should be ready to pay extra for achieving food security for the country.

Farmers were subsidising Indian consumers who do not mind 'paying Rs 10 for a mineral water bottle' but resent paying even one rupee extra for wheat or sugar, he said.