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The Centre should raise approximately 10% of her annual borrowing in the form of sovereign bonds (foreign currency denominated listed in foreign exchanges) to build upon portfolio of approximately 100 billion dollars. Thereafter, sovereign bonds offering for retirement of maturing bonds and new borrowings should be managed in such a manner that aggregated sovereign bonds outstanding does not exceed 5% of GDP, Garg said in his report on measures which need to be taken to build $10 trillion economy by early 2030.He said the government's investments in financial sector behemoths like LIC and SBI are neither yielding any proportionate returns to the government nor are being used productively for deepening and expanding financial sector in India.Likewise, foreign exchange reserves maintained by the RBI yield very low returns and now at much higher levels than required for any liquidity purpose. Additionally, by keeping these invested in treasury and other financial sector institutions abroad, their use for acquisition of strategic, technological and financial sector assets abroad is being foregone. Two sovereign wealth funds are recommended to be created for contributing to the goal of $10 trillion economy , he added.Garg is said to have miffed a section of BJP leaders and a number of financial experts such as former RBI Governor Raghuram Rajan over his insistence on the foreign currency sovereign bonds which he also made part of the Budget. He, as per several quarters, got shifted out of Finance Ministry due to this decision.A confidant India needs to raise Sovereign Bonds in Foreign Currency. Advanced economies are awash with savings, whereas developing countries like India are still hugely short of savings to fund investment, the ex-secretary said."Raising sovereign debt in foreign currency is the real opportunity to raise resources at cheaper cost to meet the investment gap. Several path breaking decisions have been opened in the past for integrating with the global economy. Time for sovereign bonds is right now. There is no medicine for irrational fear. It has to be simply set aside", he said.All macro-economic indicators suggest that investment demand has been declining in the advanced economies, whereas there is enormous unsatisfied investment demand in the emerging market countries.( With inputs from IANS )

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