•  Excessive volatility of capital funds results in significant costs to the economies and has implications for financial stability. While equity flows both FDI as well as portfolio, have been accorded substantial freedom in the capital account regime in  12  BIS central bankers’ speeches  India, debt flows are regulated with quantitative and price based measures.
Debt flows are also calibrated into sovereign as well as corporate debt. •  The sovereign balance sheet has been protected from crisis inasmuch as India does not have foreign currency market borrowing and has limited dependence on foreign investors in respect of domestic currency debt.