The finance ministry is working on various measures to raise forex to insulate the economy from any outflows that may result due to tapering of the US QE. It is confident of financing the CAD via these measures, CNBC-TV18’s Aakansha Sethi reports.
Also read: Fitch must be regretting outlook upgrade of India: CLSAOne of the measures being looked at is allocating a separate quota for sovereign wealth funds (SWF) in PSU divestment issues. For instance, in the Coal India issue this year, there could be a separate allocation for SWFs and the rest of it will be via normal qualified institutional placement (QIP). This reservation could be as high as 30 percent. The other measure the finance minister spoke about yesterday include PSUs issuing long-term debt aboard in the nature of quasi sovereign bonds. CNBC-TV18 learns from sources in the finance ministry that Power Finance Corporation (PFC) has committed to about USD 2 billion, IIFL has committed to about USD 1 billion and Railway Finance Corporation has committed to another USD 1 billion via long-term debt in overseas markets. The finance ministry is looking at least USD 4 billion via this route. It has got its CAD maths ready. It is expecting savings of about USD 15 billion due to the quantitative restrictions on gold as well as minimum of USD 4 billion via quasi sovereign bonds and other measures that are being contemplated.
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