Govt moving ahead with reforms, no need for pessimism: FM

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Govt moving ahead with reforms, no need for pessimism: FM
Terming the sudden outflow of USD 5 billion as "unfortunate", Finance Minister P Chidambaram has said that there should, however, be no room for pessimism as fundamentals of the economy are intact and government is moving ahead on the reforms path.

The Minister further said the government will take a call on revising the FDI caps in different sectors in the second or third week of July.

"Among the large emerging economies, we are the fastest growing economies next only to China and therefore I am confident that money will flow back into India. Investors will find India a safe destination to invest. And this temporary phase should pass. There is no need for pessimism", he said.

Replying to a question on declining value of rupee, the Minister said, as much as USD 5 billion went out of India within two weeks of the statement by US Federal Reserve Chairman Ben Bernanke which was "completely misunderstood".

"The rupee is very stable. A large amount of money flowed into India. Between January and May alone, I think a little over USD 5 billion flowed into India. (But) following Bernanke's statement, USD 5 billion flowed out of India in a matter of two weeks. This is unfortunate", he said.

Besides reviewing the FDI caps, the government will be taking some key decisions in the coming days, Chidambaram said.

"All these points to an economy on the move...government clearly is committed to the path of reforms. So I think we should not spread pessimism or panic. The money will flow back into India. I think things will settle down", he added.

Read more about: finance ministrty, reforms
Story first published: Wednesday, June 26, 2013, 9:20 [IST]
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