fbpx
Sunday, January 17, 2021

Cabinet may relax Foreign Direct Investment in retail

Reading Time: 2 minutesThe Union cabinet in its meeting on Wednesday would take up proposals to relax foreign direct investment (FDI) in various sectors, including single brand retail and digital media, as announced by Finance Minister Nirmala Sitharaman in her maiden Budget last month.
The liberal FDI regime is expected to attract foreign players to invest in the country which is facing a slowdown.
Cabinet. Indian Link2Seeking to make India more attractive FDI destination globally, Sitharaman had said that government would examine suggestions of further opening up of FDI in aviation, media (animation) and insurance sectors in consultation with all stakeholders.
The cabinet chaired by Prime Minister Narendra Modi may also consider approving an ordinance to roll back surcharge on foreign portfolio investors (FPIs). Sources said it had been decided to take ordinance route to scrap the higher surcharge.

Cabinet. Indian Link
Finance Minister Nirmala Sitharaman had announced rolling back the enhanced surcharge from long-term and short-term capital gains on FPIs. (Photo: India Today)

In a sort of mini Budget which included a flurry of measures to boost economy, Finance Minister had last Friday announced rolling back the enhanced surcharge from long-term and short-term capital gains on FPIs thus returning to pre-Budget status.
The Budget proposal subsequently approved by Parliament raised surcharges on super-rich having annual taxable income more than Rs 2 crore. The surcharge of 25 per cent was levied on those having taxable income between Rs 2 crore and 5 crore, and 39 per cent on those with taxable income over Rs 5 crore.
While raising the levy, the government included all the individuals and association of persons (AOPs) under the purview of the enhanced surcharge. Since many foreign portfolio investors (FPIs) are structured as association of persons (AOPs), limited liability partnerships and trusts, the higher surcharge applied on them.
cabinet. Indian link3 (1)Hit by the additional tax burden, the FPIs started pulling out money from the markets creating a negative sentiment. With massive capital outflow triggered by the levy, the government came under pressure and held a meeting with FPIs and domestic institutional investors to understand their concerns. Following the consultation, it decided to scrap the tax move.
Markets have responded positively to the surcharge roll-back with both BSE Sensex and NSE Nifty 50 indexes surging more than 2 per cent on Monday, the first working day after the much-awaited announcement.
IANS

- Advertisement -

Related Articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Podcasts

Ep8: Indian links in Indigenous Australian poet Ali Cobby Eckermann’s life

0
To celebrate NAIDOC week 2020 (between 8-15 November) I spoke to Yakunytjatjara poet Ali Cobby Eckermann about her time in India where she taught...

Ep 7: In the case of Sushant Singh Rajput

0
  The torrid and high-octane Sushant Singh Rajput case has been fodder for Indian people and press for the last few months. The actor’s tragic...

Ep 6: The Indian LGBTQ+ community in 2020

0
  It’s been two years since the world’s largest democracy repealed the draconian Section 377 which used to allow discrimination against homosexual people. Only this...

Latest News

lilly singh

WATCH: Lilly Singh’s rivalry with her overachieving ‘cousin’, Kamala Harris

0
  "Growing up I always got compared to my Indian cousins," shares Lilly Singh, reminding us of those unforgettable sibling rivalries we've all experiences at...
Udaya wentworthville

Reopening after being a COVID exposure site

0
  "We did not have a clue, because the customer was asymtopmatic." Since the news of popular spots Saravanaa Bhavan and Udaya supermarket being COVID exposure...
meeting op nayyar (1)

Why OP Nayyar continues to be this fan’s favourite musician

0
  I am an ardent admirer of O P Nayyar’s music. Anyone who knows me well, knows of my love for Indian film music from...

5 powerful poems by the brilliant Javed Akhtar

0
  A celebrated lyricist and the recipient of the prestigious Sahitya Akademi Award for his poetry, Javed Akhtar's name is synonymous with soul-wrenching, evocative writing.  His...
dog swami video

WATCH: Dog ‘blesses’ devotees outside temple in India

0
  In a now viral video, a dog stationed outside the Siddhivinayak Temple in Ahmednagar, Maharashtra was spotted shaking hands and 'blessing' devotees as they...