The government has set up a 16-member group headed by UTI Asset Management Company Chairman and Managing Director UK Sinha to review all forms of foreign investment other than foreign direct investment.
Among other things, the group, which has representatives from the finance ministry, the Securities and Exchange Board of India and external experts, will examine the rationale for taxation of transactions through securities transaction tax and stamp duty. The group has been asked to submit its report by the end of March. This is the latest committee set up by the government to examine various forms of foreign investment, with the recommendations of many other panels yet to be implemented. The move comes at a time when many governments are clamping down on capital flows.
The group, set up on November 19, will also study changes in short-, medium- and long-term regulatory and policy architecture in view of the suggestions of the various committees. In the past, there have been committees on road map for fuller capital account convertibility, on financial sector reforms and on making Mumbai a financial sector hub.
The committee under Sinha has been asked to suggest ways to rationalise norms for investments by foreign institutional investors, non-resident Indians, foreign venture capital and private equity players.
It will look at participatory notes and suggest changes in the policy architecture while keeping the know-your-customer norms in mind.