Faced with a widening current account deficit (CAD), the government is toying with the idea of increasing the foreign investment limit in gilts and corporate bonds by $10 billion each, taking the overall limit close to $100 billion. A finance ministry official told FE that any hike in the ceiling for investments by foreign institutional investors (FIIs) in the debt market, from the current cap of $75 billion, would be decided in consultation with the Reserve Bank of India (RBI). The increase in limits are expected to take place in a phased manner, the first in May-June and another towards the end of 2013. The CAD is a serious problem for the government and, as Moody’s has pointed out,

Source - http://www.financialexpress.com