As far as debt flows are concerned, it is true that there are various restrictions both at the aggregate levels as well as at micro level. While the regime for regulation of external debt has been progressively modified to cater to the emerging resource needs of the economy, there are still issues on which a comprehensive view needs to be taken. Let me elaborate.
25. Regulatory regimes the world over frown upon debt inflows and time and again the external sector instability has been found to be rooted in indiscriminate borrowing. In countries with relatively higher inflation and therefore higher interest rates, foreign currency borrowing in low-interest currencies appears attractive.