September 24, 2010 11:28 AM

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Govt. raises cap on FII

The government has raised the cap on Foreign institutional investors, FII, by 10 billion US dollars to 30 billion US dollars. With this decision FII's can now invest more funds in Indian debt markets. In addition, the government has raised the FII cap in bonds floated by companies engaged in the infrastructure business, which will provide much-needed funds for the crucial sector. The Finance Minister Pranab Mukherjee said the move will help enhance the flow of FII funds into debt markets. A statement issued by the Finance ministry said that the move will provide avenues for increased FII in debt securities and also help investment in the infrastructure sector and the development of government securities and corporate bonds markets. The statement said the decision was made in view of India's growing attractiveness as an investment destination and the need for additional financial resources for the country's infrastructure sector.The Finance Minister yesterday said that infrastructure bottlenecks, particularly power, would be a challenge to 9-10 per cent economic growth in the country.

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