Latest News Site

News

Time for sovereign bonds is right now: Garg

Time for sovereign bonds is right now: Garg
November 07
17:27 2019

New Delhi, Nov 7: Former Finance secretary Subhash Chandra Garg has asserted that India needs sovereign bonds in foreign currency while time for sovereign bonds is right now and there is no medicine for irrational fear.

The Centre should raise approximately 10% of her annual borrowing in the form of sovereign bonds (foreign currency denominated listed in foreign exchanges) to build upon portfolio of approximately 100 billion dollars. Thereafter, sovereign bonds offering for retirement of maturing bonds and new borrowings should be managed in such a manner that aggregated sovereign bonds outstanding does not exceed 5% of GDP, Garg said in his report on measures which need to be taken to build $10 trillion economy by early 2030.

He said the government’s investments in financial sector behemoths like LIC and SBI are neither yielding any proportionate returns to the government nor are being used productively for deepening and expanding financial sector in India.

Likewise, foreign exchange reserves maintained by the RBI yield very low returns and now at much higher levels than required for any liquidity purpose. Additionally, by keeping these invested in treasury and other financial sector institutions abroad, their use for acquisition of strategic, technological and financial sector assets abroad is being foregone. Two sovereign wealth funds are recommended to be created for contributing to the goal of $10 trillion economy , he added.

Garg is said to have miffed a section of BJP leaders and a number of financial experts such as former RBI Governor Raghuram Rajan over his insistence on the foreign currency sovereign bonds which he also made part of the Budget. He, as per several quarters, got shifted out of Finance Ministry due to this decision.

A confidant India needs to raise Sovereign Bonds in Foreign Currency. Advanced economies are awash with savings, whereas developing countries like India are still hugely short of savings to fund investment, the ex-secretary said.

“Raising sovereign debt in foreign currency is the real opportunity to raise resources at cheaper cost to meet the investment gap. Several path breaking decisions have been opened in the past for integrating with the global economy. Time for sovereign bonds is right now. There is no medicine for irrational fear. It has to be simply set aside”, he said.

All macro-economic indicators suggest that investment demand has been declining in the advanced economies, whereas there is enormous unsatisfied investment demand in the emerging market countries.

–IANS

TBZ
G.E.L Shop Association
Novelty Fashion Mall
Status
Akash
Swastik Tiles
Reshika Boutique
Paul Opticals
Metro Glass
Krsna Restaurant
Motilal Oswal
Chotanagpur Handloom
Kamalia Sales
Home Essentials
Raymond

About Author

admin_news

admin_news

Related Articles

0 Comments

No Comments Yet!

There are no comments at the moment, do you want to add one?

Write a comment

Only registered users can comment.

Sponsored Ad

SPONSORED ADS SPONSORED ADS SPONSORED ADS SPONSORED ADS SPONSORED ADS

LATEST ARTICLES

    महाराष्ट्र की तरह झारखंड में गठबंधन की सरकार बनेगीः सचिन पायलट

महाराष्ट्र की तरह झारखंड में गठबंधन की सरकार बनेगीः सचिन पायलट

Read Full Article