Union Finance Minister Nirmala Sitharaman has ruled out the possibility of a rethink on the issue of foreign currency overseas sovereign bonds, The Economic Times reported.

In an interview to The Economic Times, the finance minister said “I am not doing any review. I have not been asked by anybody to do a review,”. When she was asked if the government would go ahead with the decision, Sitharaman said, “Well, I have announced it (in the budget).”

On Thursday, Reuters claimed that the Prime Minister's Office (PMO) had intervened and asked finance ministry to reassess the idea of issuing foreign currency overseas sovereign bonds and seek wider consultation.

Presenting the Union speech earlier this month, the Finance Minister had proposed to raise part of the Indian government’s borrowings in the external markets in other currencies. Subsequent reports suggested that the government plans to borrow nearly $70,000 crores from the foreign overseas market out of total planned borrowing of about ₹7.1 lakh crore in 2019-20.

In her ET interview, Finance Minister, when sked about the details of any such sovereign offer, such as the timing of the issue and the size, said that it has not been worked out. “I don’t think we have worked it out as yet,” said Sitharaman, who presented the first budget of the new government on July 5.

When queried about the reports that a section of Rashtriya Swayamsevak Sangh and the Swadeshi Jagran Manch have expressed serious reservations on the decision to the government to borrow in the external markets in other currencies, FM responded by saying that “I am hearing it from you,”

Speculations were rife that the abrupt departure of secretary Subash Chandra Garg from Finance Ministry would mean the issue of sovereign bonds will not happe.

While India’ decision to sell its maiden overseas sovereign bond was criticised by former RBI governors C Rangarajan and Raghuram Rajan, another ex-governor Bimal Jalan backed the idea saying that India’s fundamentals supported the case for going ahead with the fund raising.

Sovereign Bond

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