Mark Mobius says good time to invest in India, but here’s his biggest concern

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August 31, 2019 3:35 PM

While the Indian stock market has been under pressure of late given the ongoing economic slowdown, emerging markets guru Mark Mobius says that it's a good time to invest in India with a long-term horizon.

PE deal value, Brookfield Reliance Jio Infratel deal, Reliance Industries, Reliance Industries  telecom tower assets, Grant ThorntonAccording to Mobius, there is heightened confusion with respect to taxation, after the Narendra Modi-led government announced a rollback of the recently introduced FPI surcharge tax.

While the Indian stock market has been under pressure of late given the ongoing economic slowdown, emerging markets guru Mark Mobius says that it’s a good time to invest in India with a long-term horizon. However, his biggest concern is taxation in the country. According to Mobius, there is heightened confusion with respect to taxation, after the Narendra Modi-led government announced a rollback of the recently introduced FPI surcharge tax. Notably, the stock market investors were spooked after the government imposed additional surcharge on super-rich including FPI trusts. This had severe repercussions, as FPI’s withdrew a record Rs 30,000-crore between July-August. Following the development, FM Nirmala Sitharaman said that announced the rollback of the tax earlier this month. Mark Mobius said rolling back surcharge levied on FPIs was a very good move.

Also read: Is it time for India to look beyond tariff cuts? Here’s how to boost exports’ growth

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Taking stock of the ongoing slowdown, Mobius said that both internal and external factors are at play. “50% of India’s problems are because of indigenous problems. We will look for lower taxes in India and bringing in foreign investors in infrastructure will be key,” the expert noted. Taking stock of the government’s latest PSU bank consolidation drive, Mark Mobius said that it would make a big difference and regulations would be easier. “I hope the government will look at privatising PSUs,” he added.

Yesterday, FM Nirmala Sitharaman announced a move to merge PNB, OBC, United Bank to create India’s second largest govt bank in a bid to realise India’s $5 trillion economy dream. Further, the government has decided to amalgamate seven other PSU banks into three big lenders. Nirmala Sitharaman said that Union Bank, Andhra Bank and Corporation Bank will be merged to create India’s 5th largest PSU bank entity, while Canara Bank will be merged with Syndicate Bank to form 4th largest government bank. Finally, Indian Bank will be merged with Allahabad Bank to form the 7th largest state-run bank in India.

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