Survey wants faster liberalisation of external sector

NEW DELHI: Painting a rosy picture for the balance of payments, the Pre-Budget Economic Survey on Friday favoured acceleration of pace of external sector liberalisation.

"The growing strength of India''s external sector provides enabling conditions to accelerate the pace of external liberalisation.

“Further liberalisation of the external sector is also likely to counter some of the upward pressure on the exchange rate of the Rupee," the Survey tabled in Parliament said on Friday.

Observing the current exchange rate policy of focusing on managing volatility with no fixed rate target and allowing demand and supply conditions to determine exchange rate movement, the Survey said the broad approach of watchfulness, caution and flexibility for forex market needs to be continued.

Nothwithstanding global imbalances like hardening of interests rates, volatility in interests rates and currency markets, the Survey forecast a "strong and resilient" outlook for balance of payments saying overall capital inflows were expected to remain buoyant given the positive outlook on Indian economy.