Foreign Direct Investment in India to be more user friendly
By ANIMonday, February 28, 2011
New Delhi, Feb 28 (ANI): Union Finance Minister Pranab Mukherjee today said that to make the Foreign Direct Investment (FDI) policy more user friendly, all prior regulations and guidelines have been consolidated into one comprehensive document, which is reviewed every six months.
Presenting the Union Budget for 2011-12 in the Parliament, Mukherjee said:”This is reviewed every six months, said the Finance Minister. The last review was released in September 2010,” he added.
He said the Security and Exchange Board of India (SEBI) registered mutual funds would be permitted to accept subscriptions from foreign investors to meet the KYC requirements for equity schemes.
“This would liberalize the portfolio investment route and would enable Indian mutual funds to have direct access to foreign investors. The new policy would widen the class of foreign investors in Indian equity market, which had hitherto been restricted to only Foreign Institutional Investors (FIIs), sub-accounts registered with SEBI and NRIs,” he added.
The Union Budget 2011-12 also proposed to raise the FII limit for investment in corporate bonds to enhance the flow of funds to the infrastructure sector.
Mukherjee said that the limit for investment in corporate bonds, with residual maturity of over five years issued by companies in infrastructure sector is being raised by 20 billion dollars, which would now be 25 billion dollars.
“This would raise the total limit available to FIIs for investment in corporate bonds to US 40 billion dollars. Since most of the infrastructure companies are organized in the form of Special Purpose Vehicles (SPVs), FIIs would also be permitted to invest in unlisted bonds with a minimum lock-in period of three years,” he added. (ANI)
