New Delhi: India is not looking at putting a quota on external commercial borrowings (ECBs) by corporates, finance secretary Ashok Chawla said on Thursday.
“There is no such proposal,” he said when asked if any quotas were planned on ECBs.
“As of now it is not a cause of concern. As the situation evolves we will see what needs to be done,” Chawla said when asked if the government plans to tax capital inflows.
The Economic Times reported, citing an unnamed senior finance ministry official, that India was finalising plans to auction corporate entitlements to borrow abroad, a move that could make such borrowing costlier.
The finance minister said on Wednesday that India had tools to deal with an influx of foreign capital inflows if they become disruptive, but they are not a concern yet.
With Western economies still crawling out of recession and interest rates at or near historic lows, funds have been flooding into faster-growing emerging markets, prompting some, including Brazil and Taiwan, to impose controls.