New Delhi: The government gave a patient hearing to the suggestions coming from foreign portfolio investors (FPIs) on the new tax proposed in the Budget but is yet to take a call on either revoking or minimising the impact of the new surcharge that has already seen investors taking out over Rs 22,000 crore since July 5.
The finance ministry had called a meeting with FPIs and domestic institutional investors on Friday to hear their concerns about some of the recent changes in taxation for overseas investors. Representatives of the FPIs met the Finance Minister and secretaries in North Block.
Participants comprising all major foreign institutions investors were, however, left high and dry with finance ministry officials giving no comments on their suggestions but heard everyone on each point they raised.
In the meeting, FPIs sought tax stability from the Finance Minister to be able to invest and stay invested in India while seeking rollback of the tax surcharge on them.
Nandita Parkar, president, AMRI (Association of Asset Management Roundtable of India) an association of FPIs, said “We talked about taxation, ease of doing business. We told them that India can attract 25-35 billion-dollar investment just in equity FPI flows and in order to do that to let that happen one of the conditions is a stable tax regime which is very important so that the tax does not act as a hurdle and tax needs to be predictable for investment. So that was a big issue which we discussed.”
She said quick fixes are needed for revival of stock in India.
“We made a presentation to the five secretaries and the finance minister. I feel our suggestions were listened to very very carefully.”
Leading overseas investors including Goldman Sachs, Nomura, Standard Chartered, Barclays and a host of FPIs met finance ministry officials and the minister on Friday as the government seeks to ease concerns over dwindling foreign portfolio inflows after a Budget move to increase tax surcharge on them, said three people familiar with the matter.
The meeting comes in the wake of growing concerns among FPIs over the increased tax surcharge on trusts and association of persons, a move that has been a key trigger for outflows of over Rs 22,000 crore since July.