Raghuram Rajan flags risks for govt’s overseas borrowing plan


The Indian Express
July 14, 2019
By PR Sanjai


The plan to sell bonds overseas comes as Prime Minister Narendra Modi faces shrinking options to raise funds as a slowing economy crimps tax revenues.
India’s plan to issue foreign currency debt has no real benefit and is fraught with risks, according to former Reserve Bank of India governor Raghuram Rajan.

A global bond sale won’t reduce the amount of domestic government bonds the local market has to absorb and the country should worry about short-term “faddish investors buying when India is hot, and dumping us when it is not,” Rajan has said.

Rajan adds to the growing chorus of opposition to the plan Finance Minister Nirmala Sitharaman announced earlier this month. The plan to sell bonds overseas comes as Prime Minister Narendra Modi faces shrinking options to raise funds as a slowing economy crimps tax revenues. Investors have also been concerned about his plans to borrow a record 7.1 trillion rupees ($103 billion) this fiscal year.

Reference:-https://indianexpress.com/article/business/banking-and-finance/raghuram-rajan-flags-risks-for-indias-overseas-borrowing-plan-5828944/

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