Maintaining that there is no turbulence in the Indian financial markets, Finance Minister P Chidambaram has said the Centre has no intention to impose any kind of capital controls or keep out any kind of funds.

“There is no turbulence. It was an instant reaction by fund managers that some kind of restrictions are being placed on investments by Foreign Institutional Investors,” Mr Chidambaram said.

No capital curbs
He said the Centre has clearly mentioned that it has no intentions to impose capital controls, or to keep out any kind of funds. “All we say is that instead of coming through a non transparent route of participatory notes issued on the basis of overseas derivative instruments, please come in as FIIs and register in India,” he added.
On Monday, Sebi had cleared 16 FII applications for registration and announced that it would allow proprietary sub-accounts to register themselves.

“It increases transparency. It also subjects these investors to due diligence by Indian authorities. I think clarifications have gone home now,” Mr Chidambaram said.

He further reiterated that the Centre would like exchange rate to be competitive but went on to make the point that there is ‘no choice’ but to continue with sops to exports in the face of an appreciating rupee.

Sops to exporters
“We don’t take a view on exchange rate. However, we would like the exchange rate to be competitive without hurting investments. The one way bet on rupee was causing some concern, but in the last two or three days that has changed. Rupee is moving both ways.” Mr Chidambaram said.

“What choice do we have” he wondered when asked on continuance of sops to exporters.

“If rupee continues to appreciate rapidly we have to extend some support to exporters. There are other sections of the economy that will gain by the appreciating rupee, but exports will be hit and exports are important for us... Therefore, we have given them support and if necessary we will give them support,” he averred.

“Indian market is a growing market, a market that is well regulated, a market that gives good returns. Investors will come into Indian market. I have no sense at all that investors will be deflected because of difficulties Indo-US civilian nuclear deal faces,” he observed.


CALL FOR COOLING MARKETS
Washington, pti: India has asked world’s rich countries to take measures quickly to cool down volatile financial markets, while apprehending uncertainty in 2008 with turbulence spreading from its epicenter in the US to Europe.

“We urge advanced economies to take appropriate measures to restore full normalcy in financial markets," Finance Minister P Chidambaram said at a joint meeting of World Bank and International Monetary Fund here.
He said that developed countries had injected a considerable amount of liquidity into their markets to overcome their own problems, part of which had spilled over into India and some other countries.

World Bank aid
Mr Chidambaram said World Bank should not reduce its financial assistance to India. “There are very poor and need to be helped and that help should be given by World Bank.”
He said millennium development goals will not be attained unless India and China are supported. “Please remember that while India is growing at 9 per cent there is a large number who are not growing at 9 per cent. India and China continue to house 750 million of world's poor, world’s very poor I may say,” he observed.