Advertisement
Sunday, Oct 17, 2021
Outlook.com

Too Much, Too Soon?

Capital account convertibility by the year 2000 hinges on a set on ambitious preconditions

Too Much, Too Soon?
Too Much, Too Soon?
outlookindia.com
-0001-11-30T00:00:00+05:53

There's good news for resident Indians desperate to tie up shovels of strangles foreign investment or open a high-yielding foreign currency account in a bank, at home or abroad. The road map to full rupee convertibility is finally here, thanks to a superfast job by recently retired RBI deputy governor Savak Tarapore. But it may be too early to give two cheers. The tightrope-walking by the report, which seeks to precariously balance the economic needs of the country with political compulsions in a mere three years, puts a wet blanket on any merrymaking by corporates and investors.

What is capital account convertibility (CAC)? Why is it considered the cat's whiskers for you and me or company X and company Y? The Tarapore Committee defines it as "the freedom to convert local financial assets into foreign financial assets and vice versa at market-determined (as opposed to RBI-fixed) rates of exchange". With the rupee made convertible in the current account in August 1994, this facility was opened to exporters, NRIS and foreign portfolio investors with some...

Advertisement

Outlook Newsletters

Advertisement
Advertisement
Advertisement

Read More from Outlook

Two Vendors From UP, Bihar Shot Dead By Militants In J&K

Two Vendors From UP, Bihar Shot Dead By Militants In J&K

Police claim 13 terrorists have been killed in Jammu and Kashmir in nine encounters over the last nine days.

In Ongoing Poonch Encounter, Bodies Of Two Missing Soldiers Recovered, Toll Rises To Nine

In Ongoing Poonch Encounter, Bodies Of Two Missing Soldiers Recovered, Toll Rises To Nine

According to the Army, the bodies of a jawan and the JCO were recovered during the search operation on October 16.

SAFF 2021: Chhetri Equals Messi Feat As India Thrash Nepal To Win 8th Title

SAFF 2021: Chhetri Equals Messi Feat As India Thrash Nepal To Win 8th Title

India crushed Nepal 3-0 to win their 8th SAFF title, thanks to goals from Sunil Chhetri, Suresh Wangjam and Sahal Abdul Samad.

Kerala: Six Dead, 12 Missing As Heavy Rains Cause Flash Floods And Landslides

Kerala: Six Dead, 12 Missing As Heavy Rains Cause Flash Floods And Landslides

Several people have been injured and displaced. Dams in many districts are nearing full capacity. Small towns and villages in the hilly areas are totally cut off.

Advertisement