Mumbai, March 2 : The Budget proposal which permits FII holdings in listed Indian companies to go up to 49 per cent from 40 per cent, is likely to accentuate foreign inflows (pegged at $850 million in January 2001), according to a release from Lazard India.Other measures like low interest rate regime and creation of a debt market coupled with further deregulation of ADR/GDR proceeds and its end use would further improve the market sentiment. Besides, the automatic approval in some cases for financial sector investments, subject to $ 50 million capitalisation is also a welcome announcement, Lazard adds.
A road map to downsize the government, user charges for infrastructure are some of the encouraging measures, the release said.
The finance minister has been proactive in talking about labour reforms and giving the corporates flexibility, as also the banks adequate autonomy in recruitment policies, which are welcome winds of change.
Repealing SICA, framing legislation for foreclosure of NPAs are all indicative of a more business-like attitude on these crucial issues. On the direct taxes front, the complete removal of the surcharge and the halving of the dividend tax is expected to leave large surpluses with corporates and households, which would presumably result in increase aggregate demand, the release said.
Copyright © 2001 Indian Express Newspapers (Bombay) Ltd.
