Anindita Dey / Mumbai April 25, 2008

In a significant shift in its stance, the Reserve Bank of India - the custodian of India's foreign exchange reserves - has supported the proposal to set up a sovereign wealth fund (SWF). But, unlike other countries, including China, which recently set up a $200 billion fund, its focus will be limited to the infrastructure sector.

One option is to let the government make a budgetary provision to purchase foreign exchange. The other option is to get public sector companies - particularly those with focus on strategic sectors like oil, gas and minerals - to pool in resources, transfer it to the proposed SWF and purchase foreign exchange.

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Posted by boyang at April 25, 2008 7:32 PM