Kaushik Basu: No need to Control Capital Inflow

Kaushik Basu: No Need to Control Capital Inflow

Chief Economic Advisor Kaushik Basu said to The Hindu that,

India had large capacity to handle these funds, but should keep all its options open in case the situation turns alarming.

“India already has a bunch of capital controls, so I am not personally in favour of stepping up on those and as one of the deputy governors of RBI has pointed out, the inflows that we are getting into the country are large but still not at a level that we are worried about,”

But Dr.Basu have not mentioned that, this Capital inflow (The newly printed money) will shrink the wealth of the average investors parked in PPF, RBI Bonds, Post-office savings schemes and other fixed income instruments by causing higher inflation.

This capital inflow may be good for the businesses but because of this newly printed money, the retirement of many people will become practically impossible.