Capital Account Convertibility: An Indian Perspective
Capital Account Convertibility is defined as the freedom to convert local financial assets into foreign financial assets and vice versa at market determined rates of exchange. Capital Account Convertibility is widely regarded as one of the signs of a developed economy. The impact of ongoing recession on India has been less due to the partial convertibility of rupee. The objective of the paper is to examine the present status of Capital Account Convertibility in India and to examine the approach which India has followed for full Capital Account Convertibility. It also analyses the economic indicators for India in the present situation and the challenges which Indian economy faces for full Capital Account Convertibility. The paper concludes that there is a need to wait and watch as the economy of India is not stable enough to withstand all external pressures.
