India Development News & Foreign Investment Opportunities

India to deepen the corporate bond market

Envoy highlights investment opportunities

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Envoy highlights investment opportunities

 

The High Commission of India in Singapore.
High Commissioner Jawed Ashraf (file picture).

 

India is set to deepen the corporate bond market for the infrastructure sector as well as monetizing and securitising infrastructure assets, Jawed Ashraf, India’s High Commissioner to Singapore, told investors on 15 July 2019.

“The budget has announced measures for deepening of the corporate bond market, especially for the infrastructure sector,” said Jawed Ashraf, highlighting the government’s decision to go for sovereign bonds at a forum on the Indian Budget 2019-20.

This, he said, is in addition to the slew of measures announced for providing greater role for Foreign Portfolio Investors in India, including raising the limit of FPI investments to the maximum permissible foreign investment for the sector and the possibility of investing in listed debt securities of InvITs and REITs.

He added that FPIs are to be allowed to sell off their debt securities issued by IDF-NBFCs to domestic investors within the specified lock-in period.

The Government has also announced several steps to strengthen the NBFCs, which are facing a number of challenges.

“Looking at what the government is doing about FPI and Sovereign Bonds, it tells us about the confidence that the government has in economic resilience and stability in India,” he said at forum on Indian Budget 2019-20.

“With the strength of the economy we can go more forward with the bonds and have a bigger role FPIs,” said Jawed Ashraf at the forum organized by the High Commission and PriceWaterhouseCoopers.

The Government, he said, has also taken bold steps for disinvestment in Central Public Sector Enterprises, which will introduce a high degree of market discipline and accountability.

Following the 2019-20 Budget announcement, India is also set to promote Public Private Partnership (PPP) model in the massive infrastructure development across the country, said the High Commissioner, highlighting the investment needs of the Railways over the next 12 years and the funding gap in possible public allocation.

He pointed out that the budget supports Prime Minister Narendra Modi’s key economic objectives, which are accelerating growth to achieve USD5 trillion by 2024, continue with fiscal prudence, focus on access, empowerment and inclusion, expand infrastructure, improve ease of doing business and ease of living, generate employment, reform economic governance, promote digital revolution, ‘formalisation’ of the economy, and sustainable growth.

“US$5 trillion is not just a target or an aspirational goal, it is a mission statement for the country and serves as a mobilising instrument to rally the entire economy band the public behind a common purpose. This is the first time we have a mission statement of this nature,” said the envoy.

Make in India, Startup India and curtailment of cash economy has received further boost and FDI norms are being further eased in some sectors. There is also tax deduction on investments for mega manufacturing facilities which would be set up through global bidding process, he said of the Make-in-India initiative that is designed to scale up India’s manufacturing sector.

This is in addition to the incentives for Startups and MSMEs and rationalisation of Customs duties. Government’s focus on agriculture and rural employment, enterprise and infrastructure is once again reflected in the budget, said the High Commissioner, and pointed that these build on the steps taken in earlier budgets.

Among others, incentives have been proposed for production and for purchasing of electric-vehicles as part of India’s initiatives to boost the manufacturing sector.

Indian economy, Jawed Ashraf said, offers huge opportunities for Singapore companies and investors, including in viable stressed assets through the financial resolution process in the Insolvency and Bankruptcy Code. fiinews.com

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