The Hindu : Business : Report on convertibility submitted

Online edition of India's National Newspaper
Tuesday, Aug 01, 2006

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Report on convertibility submitted

Special Correspondent

MUMBAI: The S. S. Tarapore committee on fuller capital account convertibility submitted its report to the Reserve Bank of India (RBI) on Monday. However, the RBI stated that it would place the report in the public domain in due course.

Prime Minister Manmohan Singh, in March this year, said that there was a merit in India moving towards fuller capital account convertibility (free float of the rupee). "I have requested the Finance Minister and the Reserve Bank to revisit the subject and come out with a roadmap on capital account convertibility based on current realities," said Dr. Singh while inaugurating the Asia Society's 16th Asian Corporate Conference, here.

Following this, the RBI had appointed the committee in March in consultation with the Government to set out the framework for fuller capital account convertibility. S. S. Tarapore chaired the committee, which had M. G. Bhide, R. H. Patil, Surjit Bhalla, A. V. Rajwade and Ajit Ranade as its members.

Delhi Special Correspondent writes:

Cautious approach

The Associated Chambers of Commerce and Industry of India (Assocham) has urged the Government to adopt a cautious approach towards capital account convertibility (CAC) and pursue it as a long-term goal since the time is not ripe as yet.

In a representation to the Finance Minister, Assocham President Anil K. Agarwal said, "CAC is a welcome goal, but India needs to tread on this path with care as the country faces a large number of challenges relating to CAC which include macroeconomic scenario, capital mobility and foreign exchange reserves.''

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