Reforms in financial sector to be in calibrated manner: FM

Mumbai, Oct 29 (UNI) Union Finance Minister P Chidambaram today reiterated that the reforms in financial sector, to attract foreign investments in the country, will be in a calibrated manner.

Speaking at the Indo-US CEO forum here today, Mr Chidambaram said as long as foreign funds come through proper registration and regulation, the Government will not be bothered.

Remarking on the recent sharp fluctuations in stock market and steep appreciation of the Rupee, the Finance Minister said, ''We are concerned about inflows from unregistered entities. The inflows from registered and regulated entities are fine for the country.'' Meanwhile, US Treasury Secretary Henry Paulson said that the administrative restrictions of capital flows may tend to inhibit efficiency of the Indian economy. ''Administrative restrictions of capital flows are blunt instruments and can have unintended consequences,'' Mr Paulson said.

However, he said, ''We understand that Indian officials are concerned that greater capital flows associated with a financial center could add to inflationary pressures, destabilise financial markets and add to exchange rate volatility.'' Further, Mr Paulson asserted US firms are looking forward to investing in power and agriculture sectors in India. But, he remarked that investors want certainty in their operating environment. ''India needs transparent and independent regulatory frameworks,'' he added.

Later, to a query on the same sentiments, the Finance Minister said, ''We have independent regulatory authorities and over ten years, it has been well integrated and transparent.'' Citing the example of Dabhol power project, which turned problematic around 2001-02, he said it was one of the few issues in the world which was resolved within a short period of time, by 2005.

UNI