Finmin for hike in FII debt limit, easy ETF norms
Chances are the FII limit may be raised by $5 billion each for G-Secs and corporate bonds, as it has been the practice in past few years.
The hike in FII limit in debt is also needed as Indian financial institutions are scheduled to raise R60,000 crore in tax-free infrastructure bonds in the remaining part of 2012-13. Mayaram said the government was considering strengthening the legal framework for corporate bonds through suitable amendment in the Sarfaesi Act for recovery of non-performing assets. The government may also change the Income Tax Act and Companies Act, he added.
The finance ministry is also open to any change in the rules for dedicated exchange traded funds (ETFs) for infrastructure which can help companies raise equity for mega projects. “We need long-term patient equity for infrastructure. We are open to discussion if there is a need for change in regulations,” he said. At present, only Goldman Sachs has an infrastructure ETF but the corpus is very small.
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