my point on jayant sinha and futility of courting pio by the prime minister being echoed by my friend mohan guruswamy am unable to understand this courting of PIOs by our PM? Does he think they bring major capital and technology to India? The only Indians who may be able to do that are in California, and mostly in the Bay area. Not in Cerittos. There are many Cerittos in the world where Indian communities congregate. Like Southall in the UK. The reality is that their biggest contribution is in the NRI banking accounts they open to swell our reserves. The logic is very simple. Indian banks, foreign and Indian, give generous interest rates for foreign currency deposits. So what many of our PIO and NRI folks do is to just borrow from US and other foreign banks at the prevailing low interest rates and pocket the difference. These funds are now quite huge and constitute the bulk of the hot foreign money in our system. Alongwith FII stock and debt market funds, NRI deposits niw account for about half our foreign reserves. Hot money are easy-come- easy- go funds whose sudden movements destabilise the Indian currency markets. Our foreign reserve profile is very unlike most countries who build them mostly from trade surpluses. India should be thinking of ways of reducing this dependency. But here we have our PM stoking just the opposite. This investment in NRI deposits is so profitable that many US non PIO citizens have filed suits saying this us a discriminatory practice. The new MoS in the MoF should know a good deal about this, for till he returned to India to serve the nation attracting and managing such funds was his livelihood. It is still his wifes.
Posted on: Mon, 17 Nov 2014 07:38:25 +0000
Trending Topics
Recently Viewed Topics
© 2015