Govt considers exempting FPIs from super-rich tax : Report

Govt considers exempting foreign investors from super-rich tax: Report

Government finalizing a package to reverse the economic slowdown: Report
Finance Minister Nirmala Sitharaman will hold a press briefing at 5 pm today

India may soon roll back an additional levy on foreign funds and announce other measures to boost economic growth, a government official said in comments that helped the stock and currency markets reverse losses.

Finance Minister Nirmala Sitharaman will hold a press briefing at 5 pm today, a government spokesman said, amid expectations that the government would announce steps to revive economic growth.

Indian markets are down about 10% from their June highs after Finance Minister Nirmala Sitharaman announced higher surcharge on FPIs, who have sold Indian stocks (net) worth over $3 billion over last two months. Finance Minister Nirmala Sitharaman had proposed increasing the effective tax rate on individuals with a taxable annual income of above Rs 2,000 crore ($283,000) by about 3 percent and for those earning above Rs 5,000 crore by 7 percent. Plans to exempt Foreign Portfolio Investors, who became an unintended target of the move, was first reported earlier this month.

The tax proposal, along with a lack of measures to boost the economy in the July 5 budget, led to foreigners withdrawing more than $3 billion from Indian shares, putting pressure on stocks and the rupee.

Financial markets cheered the comments about measures to spur the economy, which came a day after a top economic adviser to Modi suggested that a government stimulus for the private sector creates a moral hazard. The S&P BSE Sensex and NSE Nifty 50, India’s key equity indexes, erased declines and rose as much as 0.5 percent before paring gains. The rupee reversed losses to advance as much as 0.1 percent.

Market regulator Sebi on Wednesday eased the regulatory and compliance framework for FPI by broad-basing their classification and simplifying their registration, entry, and know-your-customer (KYC) norms in a bid to boost investments.

The government will announce the GDP data for the quarter ended June later this month. According to Bloomberg estimates India’s gross domestic product expanded 5.6% in the quarter ended June, slower than the 5.8% pace seen in the previous three months.

Economic Crisis | Nirmala Sitharaman | FPI | Tax | GDP | Indian Rupee

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