Seeking to clarify statements made by Reserve Bank of India Governor Y.V. Reddy on Wednesday, Indian Finance Minister P. Chidambaram affirmed that he has no plans to introduce new taxes on foreign institutional investors.
"Watching capital flows does not mean either curbing or capping FII inflows, nor does it mean taxing FII inflows,” the Finance Minister told reporters.
Chidambaram was responding to suggestions made by Reddy on Wednesday that large volumes of capital inflows were having a de-stabilising effect on the Indian economy, and that the government should consider limiting measures.
However, the Finance Minister was keen to stress that the government has no plans to introduce controls on FII inflows, adding for good measure that the Reserve Bank chief is in agreement with this policy.
“There is no controversy. There is no capping or taxing of FII inflows," he stated.
“The governor and I have spoken to each other and our views are the same," Chidambaram added.
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