NEW DELHI: Finance Minister Nirmala Sitharaman on Friday said the government will withdraw enhanced surcharge levied on long and short-term capital gains.
The FM also announced the withdrawal of enhanced surcharge on FPIs. Pre-Budget position restored on surcharge on domestic investors too, she told media.
Data showed FPIs have pulled out Rs 23,000 crore from domestic equities in July and August, as the Budget proposal to levy a surcharge on higher tax-income groups affected 40 per cent of FPIs, operating as trusts or AoPs, and made investment in Indian equities unattractive.
The FM said Rs 70,000 crore will released upfront to PSU banks for additional credit facilities. A dedicated cell will also be set up at the CBDT to address the tax problems of startups.
The measures are widely expected to revive depressed sentiment in the domestic equity market.
Sitharaman said that her government did not forget reforms agenda after being re-elected.
“Treating reforms as continuous endeavour,” she said.
Benchmark equity indices recouped early losses on Friday on reports that the Finance Ministry was about to unveils some policy interventions in four areas – capital markets, auto, real estate and SMEs. Hopes were high on Dalal Street following the announcement of an FM presser at 5 pm. BSE Sensex closed Friday’s session 228 points, or 0.63 per cent, higher at 36,701, while NSE’s Nifty ended 88 points, or 0.82 per cent, higher at 10,829.
Earlier on Wednesday, Sebi approved several recommendations made by the HR Khan Committee to simplify and rationalise the existing regulatory framework for foreign portfolio investors (FPIs) by easing operational constraints and compliance requirements. But that failed to stop FPIs from selling Rs 903 crore worth of equities on Thursday.
The Sebi board decided to do away with the broadbased eligibility criteria for FPIs. At present, for a fund to be categorised as broadbased, it needs to have at least 200 investors. The eligibility categories for FPIs was reduced to two from three at present. Sebi also simplified documentation requirements for KYC and the structure for registration for multiple investment managers (MI).
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