First, it would be very difficult to reckon in the Indian context – as is the case with many other countries, the “reserve adequacy” in a dynamic setting and on that basis divert a part of “excess” reserves for a higher return from riskier assets.
The current reserves management policy recognises this, based on experience during periods of both net inflows and outflows and, therefore, the overall approach to the management of India's foreign exchange reserves takes into account the changing composition of the balance of  4  BIS Review 44/2008  payments and endeavours to reflect the “liquidity risks” associated with different types of flows and other requirements.