Reserve Bank of India Governor Raghuram Rajan, on Monday, warned against compromising India’s interest for the sake of attracting foreign investment, and said the priority should be framing transparent policies as well as resolving contractual tax disputes quickly.
“The most stable form of financing, foreign direct investment (FDI) has the additional benefit of bringing in technology and methods. But India should not be railroaded into compromising its interests to attract FDI,” he said in a commentary posted on the website of Project Syndicate.
“If India is to succeed, it will have to deepen regional and domestic demand, strengthen its macroeconomic institutions, and join in the fight for an open global system. Diminished expectations abroad should not lead India to lower its ambitions,” Dr. Rajan said. Foreign inflows in the country rose by 22 per cent to $18.88 billion during the eight months of the current fiscal.
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