Saturday, Jan 11, 2003
Saturday, Jan 11, 2003 |
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By Alok Mukherjee
The Union Finance Minister, Jaswant Singh, with (from left) the Chairman, Worldtel, U.S., Sam Pitroda, the CMD, Bajaj Auto, Rahul Bajaj, the Senior Vice-President, FICCI, Y. K. Modi, and the senior Minister of State for Trade and Industry and Education, Singapore, Tharman Shanmugaratnam, at the plenary session on the `Global Business Matrix and the Indian Diaspora' in New Delhi on Friday.
The announcements relating to liberalised foreign exchange transactions were made by the Union Finance Minister, Jaswant Singh, at the on-going Pravasi Bharatiya Divas celebrations here. As per the latest decisions, the overall limit has been increased to $1 billion for mutual funds to invest abroad in companies which are listed on overseas stock exchanges and which have at least 10 per cent shareholding in a company listed on a recognised stock exchange in India on January 1 of the year of investment. The earlier cap for investment abroad by mutual funds was $500 million. Individuals too are being permitted to invest abroad in companies which are similarly listed on overseas stock exchanges and which have at least 10 per cent shareholding in a company listed on a recognised stock exchange in India on January 1 of the year of investment. But no investment limits have been fixed for individuals as yet and may be announced later. Permission has also been granted to listed Indian companies to invest abroad in companies listed on recognised overseas stock exchanges and having at least 10 per cent shareholding in a company listed on a recognised stock exchange in India on January 1 of the year of investment. However, such investment should not exceed 25 per cent of the Indian company's net worth as on the date of the last audited balance sheet. General permission has been granted to Indian companies to retain abroad their mobilisations through American Depository Receipts (ADRs) of the Global Depository Receipts (GDRs) without limits for future forex requirements. The present cap in this respect is $10,000. Simultaneously, permission has been granted to corporates who have set up their branches and offices abroad to acquire immovable property overseas for their business and staff residential purposes. Mr. Singh also announced removal of the existing limit of $20,000 for remittance under the Employees Stock Option Programme (ESOP) scheme. This will facilitate the Indian employees of foreign companies to procure higher equity stakes offered under the ESOP scheme. The Minister announced the discontinuation of limits on trade-related loans and advances by Export Earners Foreign Currency (EEFC) account holders, though the transactions will continue to be reportable to the Reserve Bank. Also, with regard to transfer of assets in India, remittance of proceeds up to $1 million will be permitted. Mr. Singh said the process of making India an attractive destination for foreign direct investment (FDI) would continue. A high-level committee was to be set up to strengthen the regulatory and penal provisions for the corporate sector to promote best corporate governance practices by liberalising corporate laws for greater business freedom and reducing compliance costs, the Minister announced.
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