Top global fund houses have urged the Narendra Modi led-government to ensure the continuous flow of assets to be monetised for their investment decisions in India. Economic Affairs Secretary Tarun Bajaj told BusinessLine: “Fund houses said if you keep throwing open (the assets), we would be interested.”

The government has announced asset monetisation mainly in road, railway and airport sectors. The effort is not just to expedite the process in these areas, but also in the power and gas sectors.

The government received feedback at the Virtual Global Investor Round Table held on November 5, chaired by the Prime Minister and attended by the heads of global fund houses on what these invetors are looking for.

These investors are interested in strategic disinvestment with management control and not just minority shareholding. They acknowledged the government’s move to privatise Bharat Petroleum Corporation Ltd and CONCOR. According to Bajaj, this could lead to encouraging response not just in these two companies but also in others.

DDT and InvITs

He said that global investors appreciated the move to abolish dividend distribution tax (DDT) and Infrastructure investment trusts (InvITs) framework. In the FY21 Budget, Finance Minister Nirmala Sitharaman announced removing the DDT and adopting the classical system of dividend taxation, under which companies would not be required to pay DDT. The dividend will be taxed only at applicable rates. She also extended the same taxation regime as available to listed InvITs to unlisted ones. InVITs are investment instruments that work like mutual funds and are regulated by SEBI.

These investors also appreciated the speed at which the government has notified Sovereign Wealth Fund for 100 per cent tax exemption. “We have notified Abu Dhabi’s sovereign wealth MIC Redwood 1 RSC Limited (also known as Mubadala) in record time while four applications are in process,” he said.

According to a Finance Ministry statement on November 3, application from MIC was received on September 18, and then after several rounds of virtual meetings, the applicant submitted its final reply on October 20. Then the final process, including consultation with Law Ministry for legal vetting of the notification, was completed in less than two weeks and the notification was issued on November 2.

Bajaj said since these fund houses are not present here in brick and mortar format, so they want a dedicated window with tax department to complete the formalities which will be done. “Our effort would be to strengthen the structure of resolution of disputes, including the time taken,” he said. It may be noted that time taken to dispose commercial dispute in Mumbai has come down to average 158 days, while it is more than 600 days in Delhi.

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