The Sovereign Wealth Fund (SWF) has been discussed several times in the past is now back on the table because government officials believe that India as a sovereign should acquire assets abroad especially in coal, oil and gold space, reports Aakansha Sethi of CNBC-TV18.
It is expected that a meeting later this week will be held between the Prime Minister, the National Security Advisor and officials of the finance ministry.
However, with wide current account deficit (CAD), forex reserve is a problem, so the the finance ministry is contemplating an option whereby forex reserves will not be used for the Sovereign Wealth Fund, on the other hand the fund can go ahead and raise its own capital with some amount of seed money.
The earlier proposal also suggested budgetary support, but taking into consideration the strain on the fiscal deficit it will be difficult at this point in time. So, the finance ministry has prepared a few proposals where budgetary support and forex reserves are not required.
It needs to be seen if the proposal is finally implemented as it has been discussed for several years but with things happening at the Prime Minister's level the matter will be taken little more seriously.