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Can I invest in shares and units of mutual funds abroad?
Ramesh Anavekar, email
The RBI has been ushering in capital account convertibility in a calibrated manner during the past few years. An Indian resident is now allowed to invest upto 2 lakh dollars abroad under the automatic route, which means one can do these transactions straightaway through his / her Indian banker(s). This includes shares and units of mutual funds abroad. The right to invest, thus, impliedly, also includes the right to open a savings account abroad for quick and easy consummation of transactions. But I suggest you take a second opinion on this aspect.
Foreign retailers
I understand the government has at last agreed to FDI in retail. Is this correct?
Mehak Ahuja, Amritsar
It isn't quite. It is only at the secretaries' level that the decision has been taken. The Cabinet has to ratify the proposal mooted by the committee of secretaries. The committee has been guarded in its proposal — Foreign Direct Investment (FDI) in retail is to be allowed only in cities with a population of more than a million. That makes 36 in our country. Anyway, if approved, it would be a good beginning with better supply chain management and extensive use of cold storage, resulting in all-round economies to the nation. Besides, it would also make for a better shopping experience. But the moot question is how the foreign retailers could afford land so crucial for a sprawling retail store, given the fact that in most of the cities, land is scarce and, therefore, their prices are skyrocketing.
Subsidiary chains
Why is the Companies Bill, 2009, against the idea of subsidiaries?
Ratan Gupta, Agra
It isn't really opposed to the idea as such, but wants to contain the process of subsidiaries in turn spawning subsidiaries, befuddling the identity of true ownership. Thus it would be fine for company A to spawn company B but it wouldn't be alright for company B in turn to spawn C. Chain or pyramid holdings has been the bane of this country and investigators are often stymied in their work while setting out to investigate the true ownership of a company, as it happened in the recent IPL controversy. Many teams' ownerships are caught in a web of complicated holdings with the strings ultimately being controlled from a distant tax haven.
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