Keeping up the tempo on improving ease of doing business, the finance ministry will hold interactive meetings with foreign portfolio investors...
Keeping up the tempo on improving ease of doing business, the finance ministry will hold interactive meetings with foreign portfolio investors (FPIs) as well as domestic investors on October 20-21 to identify measures needed to further simplify processes and to increase retail participation in the financial markets, sources said.
The meeting with FPIs is likely to focus on simplifying the procedures and documentation for registration and investment in corporate bond market, they said. The meeting with domestic market participants is expected to be on increasing retail participation in the equity market, integration of various segments of the market and deepening of corporate bond market.
Besides officials from the department of economic affairs, the meetings would also be attended by representatives of the Reserve Bank of India (RBI), the Securities and Exchange Board of India (Sebi) and and the Central Board of Direct Taxes (CBDT). The meeting with FPIs is scheduled to be held on October 20. The meeting with domestic financial market participants and stock exchanges is scheduled on October 21.
The meetings follow the back-to-back roadshows the finance minister and officials held with foreign investors recently in countries such as Singapore, Hong Kong, the US, Canada, Australia, UK and Japan, among other locations.
The government’s outreach is aimed at spurring more foreign investment and domestic private investment even as the government has accelerated public investment in the first six months of the year to revive economic activity.
With most of the strong macro indicators such as inflation, current account deficit and fiscal deficit in comfortable position, many including IMF see India as a bright spot in an otherwise gloomy global economic environment.
India’s economy is expected to grow around 7.5% in FY16 (up from 7.3% in FY15), the fastest among major economies.
Following volatility in the global markets and slow-pace of domestic economic recovery, the FPIs have pulled out a net R1,542 crore so far in FY16 as against an all-time high investment of R2,77,461 crore in the previous fiscal year.
However, foreign direct investment inflows in to the country have been a robust $9.5 billion in Q1FY16. In FY15, FDI into the country stood at $30.9 billion as compared to $24.3 billion in FY14.
On September 29, the RBI increased the limit that FPIs can invest into government securities to 5% of the outstanding stock by March 2018, that will help in additional inflows of about R1.2 lakh crore. The central bank also said the limits for FPI investment in debt securities will henceforth be fixed in rupee terms. As of now, the existing
FPI investment limit in government securities is R1.53 lakh crore or $30 billion. the RBI has also issued guidelines to allow needy corporates to issue rupee-denominated bonds overseas.