Want own terms for int’l bond indices: Finance secretary T V Somanathan

MUMBAI: The government will not make any extraordinary effort to be part of international bond indices and will participate only if it’s allowed on its own terms. The government is also concerned over the negative aspect of increased volatility that will follow an inclusion in global indices.
Speaking at the finance minister’s post-Budget engagement with industry representatives in Mumbai on Saturday, finance secretary T V Somanathan said that the inclusion of a country like India in the indices has some obvious positives and not-soobvious negatives in terms of increased volatility and vulnerability to decisions taken abroad, which have no connection to the local economy. “There is the experience in East Asia where a lot of destabilisation has occurred due to events unconnected to the domesticeconomy. This is a balance that the government will have to keep in mind,” said Somanathan.
He said the government would not bend backwards to be part of the global indices. “Policies/decisions will be taken based on India’s need, if that is acceptable, they are welcome to let us inside,” he said.
Speaking on the same topic, economic affairs secretary Ajay Seth said thatthere is a lot of uncertainty at the global level — both in terms of exchange and interest rate — and it is not the right time.