Comments
In a bid to boost FII investment in debt instruments (non-convertible debentures and bonds) issued by Indian infrastructure companies, the Government of India has increased FII limits from $5 billion to $25 billion for investment in infrastructure bonds.
With this, the overall FII limit for investment in corporate bonds increases to $40 billion ($15 billion in corporate and $25 billion in infrastructure bonds).
Experts said that though the definition of the term ‘infrastructure' is as per extant ECB guidelines, there were certain glitches. “Custodians will have to confirm to SEBI that an FII investment has indeed been done in the infrastructure sector,” said a fixed income fund manager of a mutual fund.
“For FIIs, getting a letter from the issuer that they are an infrastructure company is difficult because it is not defined so by statute,” he added.
But once a debt fund is notified as an infrastructure fund, investors would get tax breaks in the form of five per cent tax deducted at source, well below existing rates.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.