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Caution on capital account convertibility, says Chidambaram

India will proceed with caution as far as convertibility on the capital account of the rupee is concerned.

This was stated by Finance Minister Palaniappan Chidambaram during his meeting with Margaret Beekett, president of the Board of Trade and secretary of state for trade and industry of the United Kingdom.

Chidambaram said India would move on the issue along the roadmap which had been laid down by the Tarapore Committee. He said it was better to proceed cautiously and arrive there rather than take hasty decisions.

The finance minister thanked the UK government for its support in arriving at an agreement on quantitative restrictions with the European Union.

Chidamabaram allayed all fears of delegation regarding the slowing down of the reforms process.

Chidambaram said India was liberalising and reforming its economy at its own pace and there had been a number of reforms in the trade policy, industrial policy and in the financial sector. He said the government was also taking steps on public sector reforms and dismantling of the administered price mechanism on petroleum products.

He pointed out that 83 per cent of foreign direct investment was for the core sectors: coal, steel, mining, power, petroleum, electronics, ports and roads. He said the government has been able to place a mechanism for quick clearance of foreign equity.

The British business delegation showed keen interest in the insurance sector, energy sector, financial sector reforms and India's disinvestment programme.

The Finance Minister stated that British Gas, and Shell had been allowed greater investment in the energy sector.

UNI