The Centre is considering the proposal for full convertibility of the rupee on capital account and a decision on this would be taken shortly, Union minister of state for commerce B B Ramaiah said yesterday.
Delivering the valedictory address at an international conference on 'Architecting Global Village' in Hyderabad, Ramaiah said: "We are seriously thinking on how soon we should go in for full convertibility. Once foreign exchange reserves improve further, it will be done."
The minister said the government had also decided to modify the Foreign Exchange Regulations Act (Fera), keeping in view the increasing demand for its review.
Asserting that liberalisation had yielded the desired results, as reflected by growing direct foreign investments, increasing industrial production, a significant drop in inflation and a spurt in foreign exchange reserves, Ramaiah said the country was poised to emerge as a major economic power in the first half of next century.
He said a thrust was being given to attract foreign direct investment and private sector participation in development of infrastructure since the government was bogged down in a resource crunch and had to shell out Rs 50,000 crore annually towards interest on foreign loans.
He said the largest chunk of high-potential middle-class consumer market, skilled manpower and flexible legal procedures in the country provided an ideal setting to woo foreign investments, and advocated removal of trade barriers, particularly among Asian nations for development of the region.
Asserting that India was very much a part of the globalisation process, he said that since the reforms were set in motion in 1991, forex reserves had shot up from $1 billion to $30 billion, the rate of inflation had come down from 17 per cent to 5 per cent, and industrial production and exports had gone up to 12 per cent and 20 per cent respectively.
