Use of forex for infrastructure under discussion

Wednesday, 17 November 2004, 08:00 Hrs
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NEW DELHI: Finance Minister P. Chidambaram Wednesday said he would soon approach Prime Minister Manmohan Singh with a proposal to use the country's record foreign exchange reserves to fund infrastructure development.

"I am carefully calibrating the debate. I am observing all ideas," Chidambaram told the annual Economic Editors' Conference here, adding that he would take the proposal to the prime minister once he formed an opinion.

The idea of using the foreign exchange reserves, which currently stand at $122 billion, for infrastructure development was mooted by Planning Commission Deputy Chairman Montek Singh Ahluwalia.

But some economists have been of the view that to use the money to fund projects would result in stoking inflationary pressures because of the resultant expansion in money supply.

Chidambaram said the government had constituted an expert group comprising representatives of financial institutions and banks for speedy implementation of infrastructure projects, particularly in seaports, airports and tourism.

Source: IANS
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