India facing problem of big capital flows

India is facing a problem managing enormous capital inflows and the government may take steps to monitor and regulate portfolio investments by foreign entities, Finance Minister P Chidambaram said on Tuesday. "Today in India, we face a problem of enormous capital flows. This is a completely new situation for us. We welcome capital but we must learn how to manage capital, how to absorb capital," Chidambaram was quoted as saying by PTI news agency. "We need to put in place appropriate regulations, we have to put in place risk management systems," Chidambaram said. He was speaking at a meeting of the Fortune Global Forum in the Indian capital. India, one of the world's fastest growing economies, has seen foreign institutional investments surge to a record 17 billion dollars in 2007. Foreign investors pumped in a little less than 8 billion dollars in October alone. The government announced regulations for foreign investments through the mechanism of participatory notes earlier this month in an attempt to regulate the capital flows. dpa su jh