The Finance Ministry has ruled out further tightening of Know Your Client (KYC) norms for Participatory Notes (PNs) for the time being.
PNs are instruments issued by registered foreign institutional investors to overseas investors who wish to invest in the Indian stock markets without registering themselves with the Securities and Exchange Board of India. PNs have been dubbed as ‘dubious’ for being used by resident Indians in round-tripping their own money into the stock market, thus creating black money.
Addressing Indian Revenue Service (IRS) probationers here on Friday, Minister of State for Finance Jayant Sinha said the Government has significantly addressed concerns related with KYC of PNs. “There are very stringent norms and KYC is there ,” he said, while explaining that trading houses and brokerages can’t issue PNs for round-tripping. Later, Sinha told reporters, the government is committed to containing fiscal deficit at 4.1 per cent of gross domestic product this fiscal.
“We are considering all options (cutting expenditure). We are very confident that we will be able to achieve fiscal deficit target of 4.1 per cent in the current fiscal year,” he said.
Asked whether the government is considering relaxing fiscal deficit targets to give itself room to revive public investments, Sinha said, “We think it’s very important to demonstrate fiscal prudence that establishes our credibility globally as well. As of now, we are very much on roadmap and continue to pursue that.”
He, however, admitted that the government needs to be able to find resources for public investments and kick-start investment sentiments.
Revenue collection Speaking at the event, Revenue Secretary Shaktikanta Das said revenue collections are showing good signs in December. “The effort is to achieve the target,” he said, while refusing to comment on the possible shortfall.
Direct tax collections during April-November 2014 rose 5.67 per cent to ₹3.29 lakh crore against the same period a year ago. I
Indirect tax collections during this period stood at over ₹3.28 lakh crore, up 7.1 per cent from a year ago. Budget targets for direct and indirect tax collection are 15 per cent and 25.8 per cent, respectively.