Days after Reserve Bank of India Governor Raghuram Rajan raised the issue of capital account convertibility, minister of state for finance Jayant Sinha on Wednesday said it is one of the measures that India must take over a period of time such to become a leading global economy.
"We have to make it possible for our capital markets to be broader, deeper and for that, capital account convertibility also becomes important," Sinha said without specifying any particular time frame.
Capital account convertibility implies that investors can convert local currency into foreign currency for capital transactions. The IMF and the World Bank, in projections released on Tuesday, have forecast that India's growth rate would be fastest in the world.
Pointing out that the Indian economy has opened up more over the last few months, Sinha indicated that it now has to move towards capital account convertibility. "Definitely, we have to play our rightful, responsible role in the global economy, we have to move in that direction," he said.
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