The Government would like to move slowly to full convertibility of the Indian rupee, Finance Minister Pranab Mukherjee told parliament on Friday.
"The full convertibility of rupee is our ultimate destination and we are taking gradual steps towards this. However, it is felt that it is not time to jump to that destination at one go now," Mukherjee said in a prepared answer to parliament.
"Considering the risks involved in opening the Indian economy fully by allowing complete convertibility of the rupee, the Government and the RBI have adopted a calibrated approach," the Finance Minister said.
The Government intends to go for full capital account convertibility in a three-stage plan, extending to the fiscal year 2010-11. It would allow greater movement of capital in and out of the local currency. The rupee has been convertible on current account since 1994.
"Fiscal consolidation, lower inflation and a stronger financial system were seen as crucial signposts for India," Mukherjee said.