Explanation:

The Tarapore Committee primarily focused on the issue of full convertibility on the capital account. It analyzed the potential benefits, risks, and challenges associated with achieving full convertibility.

Recommendations of S.S Tarapore Committee:

• NRI tax benefits are being cut down.
• RBI will have more power.
• On the fiscal deficit, he's completely cheeky.
• Allowing investment channels to pass through a specific country (such as Mauritius).
• Reduction of the government's interest in banks from 51% to 33%.
• Allowing industrial houses to take a stake in existing banks or start new ones.
• Allowing international banks to have a stronger footprint.
• The 10% voting cap on bank investments should be abolished.
• Corporates from outside India should be allowed to invest in Indian markets.
• Individual NRIs should be able to invest in the Indian market as well.
• Both the national and state revenue deficits should be erased by 2008-09, with a revenue surplus of 1% by Financial Year 2011.
• Raising the limit on commercial borrowing from outside the U.S. (ECB).
• Participatory Notes (PNs) will be banned, and current PNs will be phased out over the next year.
• Raising the government debt ceiling from $2 billion to 10% of new issuance and $1-5 billion to 25% of new corporate debt issuances in a year.
• Building sufficient reserves and keeping the current account deficit below 3% of GDP.
• The Companies Act should be applied to all banks.
• All three essential stakeholders in this process, residents, domestic enterprises, and foreign investors, should have more financial flexibility, according to the committee.