The government has decided to allow Qualified Foreign Investors, QFIs, to directly invest in the Indian equity market, starting off the New Year on a liberalisation note. An official statement issued in New Delhi said, this has been done to widen the class of investors, attract more foreign funds and reduce market volatility and deepen the capital market.The move comes against the backdrop of significant foreign capital outflows from the domestic equity market in recent times, which has resulted in rupee volatility. A QFI is an individual or group or association resident in a foreign country that is compliant with Financial Action Task Force standards of the government. QFIs do not include Foreign Institutional Investors (FIIs) or sub accounts.Our correspondent reports that, amid severe volatility in the capital market last year, FIIs outflows amounted tomore than 2,700 crore rupees. The situation had an impact on the rupee, which fell to an all-time low of to 54.30 rupees on 15th of last month and fluctuation in the domestic currency has put pressure on policymakers. Market regulator Sebi and the Reserve Bank of India are expected to issue relevant circulars to operationalise the scheme allowing QFIs to directly invest in Indian equities by the 15th of this month.