Sunday, November 6, 2011

Group of Ministers (GoM) agreed in principle on setting up a sovereign wealth fund

A Group of Ministers (GoM) on external security interface chaired by Pranab Mukherjee has agreed in principle on setting up a sovereign wealth fund to help companies acquire mineral and energy assets abroad. The money from the fund would be available only to state-owned undertakings, and not those in the private sector.


he government is studying two options — dipping into the country’s $350 billion foreign exchange reserves, and setting aside monies from the budget. While Planning Commission Deputy Chairman Montek Singh Ahluwalia has recommended using a part of forex reserves, the Reserve Bank of India is opposed to such a move.

It has become important to set up a sovereign wealth fund in the backdrop of rising coal and oil prices.

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