India’s foreignexchange reserves stand at $ billion (about 15% of GDP), enough to finance the entire current-account deficit for several years. Even if you count all of trade credit as well as maturing deposits held by overseas Indians as short term debt, India’s reserves can pay them all down and still have money left over. That said, India can do better – much better.
The path to a more open, competitive, efficient, and humane economy will surely be bumpy in the years to come. But, in the short term, there is much low-hanging fruit to be plucked. For instance, we are committed to developing our financial system, and carefully expanding access to finance can be a source of tremendous growth in the years to come.