New Delhi, Nov 18 (IANS) As foreign fund inflows topped $15 billion this year and caused the rupee’s value to appreciate, Finance Minister Pranab Mukherjee Wednesday said India has systems to monitor such flows and will take counter-steps if the need arises.
“It is not a matter of concern. We have a system of monitoring the flows,” Mukherjee told reporters on the margins of an event organised by the Union Bank of India when asked about the steps intended to curb the large investments by foreign funds.

“Whenever we find there are some distortions, we have the arrangement to counter-act. Therefore, it is not disturbing,” the finance minister added.

These large investments, coupled with a much higher dollar inflows into the country on account of foreign equity this year, have contributed largely to an appreciation in the value of the Indian rupee.

While exporters are unhappy that the rising value of the Indian rupee is making their merchandise uncompetitive in the global markets, policy-makers are worried over its impact on inflation.

As per statistics available with the markets watchdog, Securities and Exchange Board of India, inflows from foreign funds into the country’s equities market amounted to $15.142 billion this year, taking their cumulative investments till date to $70.295 billion.

The Associated Chambers of Commerce and Industry (Assocham) has even recommended a tax on foreign funds and moderate deterrents, as large inflows are gradually becoming a cause of concern for policy-makers including the central bank.

“Imposing a 2 percent tax on foreign institutional investors is recommended as has been done by Brazil in the recent past so that possible imbalances in capital market are corrected and India doesn’t repeat the events of 2007,” the chamber said.