Freeing foreign portfolio investment ( FPI) up to 49 per cent across all key sectors, as the government has done, might lead to more flow of short- term money. And, raise the volatility in capital markets, worry some. However, the government has played down the fears, saying it would rather curb existing misuse of FPI caps. The government on Thursday said it had decided to allow FPI up to 49 per cent through the automatic route in most sectors. And, all types of foreign investments – FDI, FII, NRI, FVCI, QFI, LLPs and DRs – have been subsumed into a single cap in each sector. Directly impacted by the liberalisation are expansion in pharmaceuticals, power exchanges, stock exchanges, credit information companies, commodity exchanges, single- brand retail, insurance and pensions, and publication of facsimile editions of foreign newspapers, scientific and technical journals. The worry, says Dev Raj Singh, executive director ( tax and regulatory services), EY, is that, “ All these sectors