INDIAN ECONOMY

Capital inflows have not become a problem for the Indian economy as of now and the country does not face a situation that requires imposition of capital controls, Prime Minister Manmohan Singh said on Tuesday.

"Well the Tobin tax has merit in particular situations but as far as India is concerned we have not reached a stage where capital flows have become a problem," Singh said.

"If capital inflows into our country both by way of direct investment and by way of portfolio investment have been at reasonable levels, we don't face situations of the kind which would require an imposition of Tobin Tax."

Foreign fund flows into and out of stocks play a crucial role in determining the rupee's fortunes. So far in June, foreigners have bought a net $1.9 billion worth of shares, almost reversing the $2 billion outflows seen in May.

Foreigners are net buyers of $6.5 billion so far in 2010.

Singh also said the world economy needs a "calibrated attempt" at fiscal consolidation rather than a one size fits all sort of action.

He also said India's fiscal situation is a cause for concern.

"...Our fiscal situation is a cause for concern but when we compare the fiscal deficit or the GDP debt ratio of the major developed countries, I think we come out much better," Singh told reporters on his way back from the G20 summit in Canada.

Earlier on Sunday at the summit, Singh had warned of the risk of global double-dip recession if countries simultaneously cut government spending, recommending a nuanced approach for dealing with public debt.

MARKET NEWS

Reliance Industries has discovered more oil on the western coast, raising the potential of exploratory blocks it has been drilling, the company said on Monday.

India's biggest conglomerate whose businesses span petrochemicals, refining, oil and gas exploration and retail said the current flow was at 410 barrels of oil per day (bopd) at the at the Cambay basin block in Gujarat.

This is the seventh oil discovery by the company in the region. The potential commercial interest of the discovery is being determined through more data and analysis, Reliance said in a statement.

The company also said it is continuing further exploratory drilling efforts in the block, and it had informed the Indian government about the latest discovery.

Reliance holds a 100 percent participating interest in the block, and has so far drilled 17 exploratory wells in the block that covers an area of 635 square kilometres.

Last year Reliance, controlled by billionaire Mukesh Ambani, started pumping gas from its block in the vast Krishna Godavari (KG) basin off India's east coast, where it made the country's largest gas find.

It has been producing about 60 million standard cubic metres a day (mmscmd) of gas from the block. At peak output of 80 million mmscmd, it could nearly double India's gas output.

Reliance also produces oil from its D6 block in the KG basin, and holds a stake in the Panna, Mukta and Tapti oil and gas fields off India's west coast.

The company, which owns the world's largest refining complex in Gujarat, said last week it will invest $1.36 billion in the U.S. shale gas assets of Pioneer Natural Resources, its second such investment in as many months as it builds business beyond the Indian energy sector.