PM pushes for $100b sovereign wealth fund

Tags: Plan

Singh to meet Chidambaram on modalities soon

The prime minister’s office does not agree with the finance ministry position that the country does not have enough foreign exchange to set up a sovereign wealth fund. Prime minister Manmohan Singh is keen on creating a $100 billion fund.

Finance minister P Chidambaram will soon meet the prime minister to discuss the next steps towards creating the fund. “Inputs from various ministries have been received. The prime minister will now give a final directive,” says an official.

At a recent meeting chaired by the prime minister’s principal secretary Pulok Chatterjee, finance ministry officials said that the foreign exchange was not enough for the fund.

India is among very few countries in Southeast Asia and the only Brics member not to have a sovereign wealth fund.

The main objective of such a fund is to look for energy assets abroad, besides fertiliser assets to boost domestic food production.

The PMO has suggested that the fund can be started with a corpus of $20 billion, to be raised to $100 billion in three years, “as and when” the government finds “energy and fertiliser assets worth buying into.”

Both the petroleum and fertiliser ministries have been asked to identify such assets. When set up, the fund and public sector firms will be asked to jointly bid for energy and fertiliser assets globally.

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