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Chidambaram: No, it can’t be because the FDI signal is a more powerful signal than FII signal.

Raghav: So I can detect that you are not quite convinced about that although that would be perceived as extremely positive.

Chidambaram: The better approach would be, if you want to increase the cap, increase the cap for foreign investment per se. Don’t make a distinction between FDI and FII unless it is absolutely necessary. Keep FDI and FII fungible but within the overall.

Raghav: So that’s the big one that you are not likely to accept.

Chidambaram: What I am saying is equally big one. If this has come as a recommendation of Lahari committee, you will probably say this is a big one.

Raghav: Liquidity position in the economy, that is a bit of a concern. Everyone is being talking about how the interest structure is all moving up. Last time you try to lean on the Central

Bank Governor by saying that reverse repo rate is temporary. Are you likely to lean on him again to release some more resources, maybe cut the CRR?

Chidambaram: You don’t quite understand the relationship that I enjoy with Dr Reddy. I made that statement after I had discussed the matter with him. I recognise that there was perhaps an immediate need to tweak the repo and reverse repo rates because we didn’t know what Mr Ben Bernanke was going to do. We didn’t know what the European Central Bank was going to do. Now we are pretty clear what they are likely to do in March and in April. But I said that once we knew where those rates were resting or settling down, we could always reverse this. Call money rate yesterday came down to 6.5.

Raghav: It is fairly high?

Chidambaram: It was over 7. Our effort is to bring the call money rate down, inject liquidity. The Reserve Bank has said that it would look at each one of the instruments in a sequential order. First is LAF that is repo on a reverse repo. Second is unwinding the market stabilisation fund. Third is the CRR. Therefore, in that order, the Reserve Bank has promised to take steps to inject ample liquidity for the demanders of credit.