Risky business

The finance ministry is looking for ways to borrow from foreigners. It may be better for the government to borrow from foreigners, who cannot be arm-twisted, rather than borrowing in India, where banks are forced to borrow from the government. The four key principles to be used to guide foreign borrowing are as follows: getting debt management out of the RBI; emphasising foreign investment in India rather than issuance abroad; establishing a clear target as a ratio of GDP for the stock of borrowing from foreigners; and building the high-quality institutional capability required to engage with global bond investors.

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