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Capital flows no problem yet for India: PM
Published on 14 Nov. 2010 12:11 AM IST
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Capital flows into India are not a problem as yet and are not causing inflation in a manner that can be seen as a matter of concern, Prime Minister Manmohan Singh said Friday.
“Capital flows can create problems but we are not in that stage where capital flows can become a major problem,” the prime minister told journalists on way back from Seoul after attending the G20 Summit.
“We will manage our affairs in such a manner that capital flows do not give rise to inflationary problems,” the prime minister added.
The remarks come at a time when it is being hotly debated if India’s current account deficit -- difference between imports of goods, services and transfers and outflows on similar accounts -- is sustainable at 3 percent of its economic output.
Planning Commission Deputy Chairman Montek Singh Ahluwalia had Wednesday said in Seoul there was no need yet for New Delhi to introduce controls on capital flows, including portfolio investment.
“I personally do not think there is any need to alter the present policy for foreign direct investment inflows because I think that’s not a very volatile thing, and if we get more of it within the realm of possibility then it’s excellent,” he said.

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