Sovereign fund idea dropped

Aug 10, 2010 |

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New Delhi, Aug. 10: The government on Tuesday said that it has dropped the idea of creating a sovereign wealth fund for financing company acquisitions abroad, as it felt that Indian firms had enough money for foreign takeovers.

“It was decided not to pursue this proposal (of setting up a sovereign wealth fund). It was felt at that time, that a number of avenues for funding of acquisitions abroad were available and that money was not a constraint for Indian companies to acquire assets/companies abroad,” the minister of state for finance, Mr Namo Narain Meena, told the Rajya Sabha.

The sovereign wealth fund (SWF) was proposed to be set up with a corpus of $5 billion, he said in a written reply.

However, in the Lok Sabha earlier last week, Mr Meena had said that the consideration for the creation of such a fund was an ongoing process that depended on different circumstances, including the evolving nature of the financial systems in India and the world.

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