As far as foreign direct investment is concerned, consistent rebalancing in the desired direction is done by expanding the automatic route and by moving most of the prohibited transactions to the non-automatic but approval route and at a later stage, to an automatic or deregulated regime. There is full convertibility for portfolio flows through Foreign Institutional Investors as far as equity markets are concerned.
A major area of managing the capital account relates to external debt and the objective in this regard is, in a way, to ensure that short-term debt obligations conform to what is known as Guidotti-Greenspan prescription for avoiding crisis in the emerging economies.