The finance ministry has scrapped a proposal to set up a sovereign wealth fund (SWF) because there was “no need for it”, at least for now.The ministry said the domestic markets have enough depth for the government to borrow funds to finance the fiscal deficit, and companies can tap external markets for borrowings.“At the moment, we are not planning an SWF. We don’t think there is a need for it,” Economic Affairs Secretary Arvind Mayaram told Business Standard. There was never a plan to set up an SWF, he said. “There were discussions. Plan means we decided and shelved it.”Mayaram said there was no requirement for such a fund at the moment. “SWF is either required to raise money to fill the (fiscal) deficit because the domestic market is not adequate to do that or it is required because the corporate market could not attract funds for foreign investors. To us, neither of those conditions exist.”

Source - http://www.business-standard.com