Capital Inflows into India

Brazil and Taiwan have taken steps to curb hot money inflows, and other governments are keeping a watchful eye on inflows, wary that they could fuel asset price bubbles. The IMF's chief economist on Monday warned of bubbles in emerging markets on uncontrolable capital movements, which was echoed by the Asian
Development Bank on Tuesday.

The Indian government can absorb nearly $100 billion of dollars in capital inflows, nearly double what is expected this year, before it needs to take strong restrictive measures, C. Rangarajan, chairman of the
Prime Minister's Economic Advisory Council said on Tuesday. Economic growth was picking up, and should hit 7 to 8 % in the fiscal year starting March 2010, he said, adding the biggest worry over the next few months was rising inflation.