Full Capital Account Convertibility

IS INDIA READY FOR FULL CAPITAL ACCOUNT CONVERTIBILITY?

Capital account convertibility means the relaxation of controls on the capital transactions made by a home country to other respective countries that are in relation with respect to trade, finance, commerce, industry etc As India is a developing economy, and the country should be in a position to withstand major repercussions with respect to financial emergency that occurs at times. If we consider an example USA- a developed economy in the world faced financial crisis in a bad way this is because of some financial destruction in the banking sector, this became a lesson to major nations in the world for facing such situations. Capital account convertibility becomes a major tool to play an important role in the world trade. India is at its best as far as current account convertibility is concerned. In addition to this India started the process of capital account convertibility but it is not full to its extent. For any policy that government frames there will be definitely pros & cons in its features but at the end the policy is for the benefit of majority people in the country. In the same way the capital convertibility will be beneficial for the country if we do follow several pre-requisites then It will give its best out to country. As far as our knowledge is concerned a foreign investor can invest in our country to utilize the inputs and produce the output this indeed will give not only benefit to the investor but also to countries economy and resources will be utilized to its best. In the same way the Indian investors can bet on foreign projects so that our country GNP will be improved. The fact is that the country partially started the convertibility aspects but not to the fullest and another threatening factor that slowed down the process is that the policies, guidelines were stringent enough that foreign investors were not willing to frameworks like direct investment into several sectors is...