He raised the FII limit in five-year corporate bonds for investment in infrastructure by $20 billion with the home of increasing the flow of funds to the infrastructure sector.
This move is aimed at raising the total limit available to the FIIs for investment in corporate bonds to $40 billion.
As most of the infrastructure companies are organized in the form of Special Purpose Vehicles (SPVs), FIIs would also be permitted to invest in unlisted bonds with a minimum lock-in period of three years.
Mukherjee has also permitted Securities and Exchange Board of India (SEBI) registered mutual funds to accept subscriptions from foreign investors who meet the Know Your Customer (KYC) requirements for equity schemes.
This would enable Indian Mutual Funds to have direct access to foreign investors and widen the class of foreign investors in Indian equity market.
Currently, only those FIIs and sub-accounts registered with the SEBI and Non Resident Indians (NRIs) are allowed to invest in mutual fund schemes
The Minister has focused on making the Foreign Direct Investment (FDI) policy more user-friendly by consolidating all prior regulations and guidelines into one comprehensive document, which is reviewed every six months.
“Discussions are underway to further liberalize the FDI policy,” he said.
According to Mukherjee, the government has commissioned a study on unaccounted wealth held within and outside India to find ways to tax and repatriate illicit money.
“A group of ministers has been constituted to consider measures for tackling corruption,” he said.
Their task is to look into state funding of elections, speedier processing of corruption cases of public servants, transparency in public procurement and contracts, discretionary powers of Central ministers and competitive system for exploiting natural resources.
The group has to make recommendations in a time bound manner.
The budget proposes a total of INR2.5 billion to two Muslim organizations: the upcoming centers of Aligarh Muslim University at Murshidabad in West Bengal and Malappuram in Kerala; and Maulana Azad Education Foundation.
The special grant is to recognize excellence in universities and academic institutions.
