Raising funds from overseas may be easier but at what cost? Can the economy
bear such losses? The cost will certainly outweigh the benefits. Instead, the FM would do well to raise domestic savings and improve the
investment climate to attract inflows. He has to give assurances on the steady
taxation policies and removals of major hurdles to do the business with ease.
Investors need to be attracted and funds coming only as investments than loans
are good for the economy. The present crisis the economy is
facing needs solution through improved political climate, reduced
inflation and inflation expectations, increased savings in financial
instruments particularly in savings and FD deposits of banks,enhanced
exports by reviving industries which have fallen short of expectations,
reduced imports, well managed expenditure controls particularly
expenditures involving foreign exchange, improved efficiency in
administration to minimise corruption, black money dealings, red tap ism etc.
There are huge cash resources with a large number of Corporates and High
net worth individuals and the Government should be able to tap them
even at a slightly higher cost to tide over the resources crunch. The
solution does not lie in borrowing funds from abroad.
(This comment in response to Chidambaram hints at making overseas resources raising easier appeared in Business line dated 1/8/13)
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