Motiveless as usual.....
In India, we exclaim in surprise if our administration system becomes efficient. And this post is going to give you no reason for such a rare occasion.
The famous author and columnist Surjit S Bhalla, in a guest column for rediff argues against the illogical system of foreign portfolio investment where only institutions approved by SEBI can participate in the Indian Stock Market.
This policy commands that -
“These management fee-receiving institutions cannot be based in India because if they were, they would not be classified as an FII! Foreign-based individuals (Indian and foreign) are forbidden from investing in India.”
The X-factor around which Surjit argues is that while the Government is gaining nothing from this policy, it is loosing out on three important fronts – “large-scale employment in the financial sector, the development of India as a financial centre, and large-scale tax revenues (India lost close to Rs 10,000 crore (Rs 100 billion) in tax revenue last fiscal (2005-06).”
As per the policy –
“We require all foreign investors in the Indian stock market not to be based in India! Let me phrase it in a different, but equivalent, fashion. We state to the outside world that yes, India is generating wealth, yes, you can come and profit from it, but no, you cannot be based in India, or have India-based offices making the decisions. All the profits that you make are yours, and please pay the taxes on the fees that you generate to needy governments like the US and the UK.”
Through a crude analysis form the 2005-2006 FII profits, Surjit concludes that these institutions could yield a cool Rs 10,000 crore (Rs 100 billion) to the Indian treasury in the current financial year which is enough to finance the first year of the National Rural Employment Guarantee Scheme.
Now, the question which the government always leaves unanswered while devising these policies is ‘What is the motive for designing this policy?’
For drafting any policy an answer to this simple question would not only make the system more transparent rather would also facilitate a national debate which is a part and parcel of any “good Democracy”(sounds like an Oxymoron….right!!!)
The X-Man
Manish Saini
The famous author and columnist Surjit S Bhalla, in a guest column for rediff argues against the illogical system of foreign portfolio investment where only institutions approved by SEBI can participate in the Indian Stock Market.
This policy commands that -
“These management fee-receiving institutions cannot be based in India because if they were, they would not be classified as an FII! Foreign-based individuals (Indian and foreign) are forbidden from investing in India.”
The X-factor around which Surjit argues is that while the Government is gaining nothing from this policy, it is loosing out on three important fronts – “large-scale employment in the financial sector, the development of India as a financial centre, and large-scale tax revenues (India lost close to Rs 10,000 crore (Rs 100 billion) in tax revenue last fiscal (2005-06).”
As per the policy –
“We require all foreign investors in the Indian stock market not to be based in India! Let me phrase it in a different, but equivalent, fashion. We state to the outside world that yes, India is generating wealth, yes, you can come and profit from it, but no, you cannot be based in India, or have India-based offices making the decisions. All the profits that you make are yours, and please pay the taxes on the fees that you generate to needy governments like the US and the UK.”
Through a crude analysis form the 2005-2006 FII profits, Surjit concludes that these institutions could yield a cool Rs 10,000 crore (Rs 100 billion) to the Indian treasury in the current financial year which is enough to finance the first year of the National Rural Employment Guarantee Scheme.
Now, the question which the government always leaves unanswered while devising these policies is ‘What is the motive for designing this policy?’
For drafting any policy an answer to this simple question would not only make the system more transparent rather would also facilitate a national debate which is a part and parcel of any “good Democracy”(sounds like an Oxymoron….right!!!)
The X-Man
Manish Saini
posted by Manish Saini at
4:34 AM
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