There is no urgency for including Indian government bonds in the global bond indices, according to Arvind Mayaram, Economic Affairs Secretary, Ministry of Finance.
His comments come in the backdrop of India’s foreign exchange reserves rising to comfortable levels. As on November 22, the reserves stood at $283.5 billion.
“There is no target for it. It would be interesting to be on the global indices, but it is not a matter which is so urgent that it requires an immediate decision. We are deliberating on this with different parties and much of it will be done by the RBI,” Mayaram said at an annual conference on bonds by ratings agency Crisil.
Recently, RBI Governor Raghuram Rajan had also pointed out the need to bring more depth to the Indian bond market.
On removing the foreign institutional investor limit of $75 billion in the bond market, Mayaram said a decision will be taken after deliberations with the RBI.
Rupee- bonds
Mayaram also pointed out that Asian Development Bank (ADB) and other multilateral entities are considering issuing rupee-denominated bonds in overseas markets.
“ADB is planning to issue rupee bonds. They have expressed their interest,” Mayaram said.
International Finance Corporation, a unit of the World Bank, last week issued rupee-denominated bonds to raise Rs 1,000 crore (about $160 million) at a fairly competitive rate of 7.75 per cent. This issue will serves as a benchmark for Indian bonds globally.
IFC plans to raise up to $1 billion through these bonds to aid the infrastructure sector in India.
Earlier in a speech at the same event, Mayaram said India was looking at making rupee settlements eligible on Euroclear debt platforms. “This will benchmark globally the bonds we have and similar participation will make the bonds more internationally competitive,” he said.
The Government has been eager to internationalise the rupee and has also been in talks to get trading partners to accept rupee payments for their exports.
In addition, “We are looking at announcing the guidelines for Reits and infrastructure trust funds for pooling of investments. These will be announced very shortly,” Economic Affairs Secretary said.
With regard to the assessment on spending cuts, Mayaram said the estimate would be known by March 20. He added that the Government is trying to maximise revenues and is hopeful of coming close to achieving the fiscal deficit target of 4.8 per cent.
Divestment target
The divestment programme of Rs 40,000 crore for the fiscal year ending in March 2014 is expected to be fully met, the Secretary said.
The Government has outlined a total borrowing plan of Rs 5.79-lakh crore for the full fiscal year, with Rs 2.35-lakh crore scheduled to be completed during October-March.
Mayaram also said he was hopeful that GDP growth would begin to claw its way up.