Mumbai,
March 1
The Union Budget could fuel investments in the infrastructure sector by permitting mutual funds to launch and operate dedicated infrastructure funds.
Mutual fund managers say it was unclear whether the infrastructure-dedicated funds would be allowed to invest directly in infrastructure projects as currently they are investing in stocks of infrastructure companies.
"Guidelines from Association of Mutual Funds in India (AMFI) and SEBI will be awaited in this regard. The investment could be in infrastructure projects like ports, power, construction companies, etc. The Government could also allow tax benefits through this investment," said Mr Ajay Bagga, CEO, Lotus India Mutual Fund.
Some fund managers feel investments could be through the bond fund route and also help investors avail tax benefits.
"It indicates that tax free bonds for infrastructure projects may be introduced," said Mr Sanjay Prakash, CEO, HSBC Asset Management (India) Pvt. Ltd. It could also be a move to get more retail investors, he added.
"The decision to permit mutual funds to launch dedicated infrastructure funds will be instrumental in channelising retail money into infrastructure development," said Mr C. Parthasarthy, Chairman, Karvy Group.
"The issuance of dedicated infrastructure schemes by mutual funds will ensure domestic commitment and may augment foreign flows into the sector," said Mr Swaminathan, National Head - Mutual Funds, IDBI Capital Market Service Ltd.
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