India needs to take many policy measures over a period of time, including moving towards full capital account convertibility, to become a leading global economy, Minister of State for Finance Jayant Sinha has said.
"There are many policy measures and many things that we have to do over a period of time, if indeed India has to become a leading global economy... We have to make it possible for our capital markets to be broader, deeper and for that to happen, capital account convertibility also becomes important," Sinha told reporters at an event here.
"Definitely, we have to play our rightful, responsible role in the global economy, we have to move in that direction (capital account convertibility)," he added.
The Minister's statement assumes significance as Reserve Bank of India (RBI) Governor Raghuram Rajan had recently said that the central bank was looking at allowing full capital account convertibility in a few years.
Stating that the RBI was fairly open to capital inflows, the Governor had said: "The only place today that we have some restrictions is inflows into debt, especially very short-term debt."
Full capital convertibility means a foreign investor can repatriate his money into his own local currency at will, which is not allowed in the country as of now.
National Pension System
Stressing that the old age traditional support system for retired people is increasingly eroding in India, Mr. Sinha highlighted on the need for making National Pension System (NPS) universal.
"We are going to support retired people. If we will make NPS universal, then we will have a pool of savings, which can finance infrastructure projects," he said.
NPS was initially introduced for the central government employees joining on or after January 1, 2004. Later, in order to facilitate organised entities, including public sector organisations, a customised version of NPS, known as NPS-Corporate Sector Model, was introduced in December 2011
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