News analysis: India’s foreign exchange debate

At the end of February this year, India's finance minister, P. Chidambaram, announced that some of India's foreign exchange reserves would be diverted to help raise funds to spend on infrastructure projects. Debate on a transfer from the Reserve Bank of India's reserves has been simmering away in Indian politics for some time, but to date tentative suggestions from the government have been rebuffed by the central bank.

Infrastructure needs

The recent proposal is more concrete and has not yet bee