Reforms and the sale of stakes in state-owned companies will continue even as India refines rules and procedures to make life easier for companies and strives for self-sufficiency, Finance Minister Nirmala Sitharaman told industry leaders on Monday. .
Sitharaman told business leaders that the government’s program for the sale of stakes in state-owned companies will accelerate in the coming days.
“The momentum of reforms will continue. Several more active steps related to reform are taken. The financial sector is professionalized. The divestment agenda continues. We will go with greater momentum to get the privatization, which has been approved by the cabinet, go ahead, “said Sitharaman. She spoke at a virtual conference organized by the Confederation of Indian Industry (CII), the chamber of industry, on multinational companies operating in India.
India has established a ₹Divestment target of 2.1 trillion for this fiscal year, but so far it has only exceeded ₹6.1 billion rupees due to the pandemic. On Monday, the Finance Ministry launched a tender to hire a consultant for a year to help with the divestment program.
Amitabh Kant, executive director of the federal policy think tank NITI Aayog, who spoke at the conference earlier in the day, said the government has identified several assets for monetization that will provide a strong investment opportunity to long-term investors. such as sovereign wealth, pensions and insurance funds. “We have identified various assets for monetization, including pipelines, gas grids, power lines, ports, airports, and non-core power supply units,” Kant said.
Sitharaman said that sovereign wealth funds are showing interest in participating in India’s infrastructure development program. He said National Investment and Infrastructure Fund Ltd., a government-anchored investment platform, has been actively collaborating with sovereign wealth funds to help them take advantage of tax concessions for their infrastructure investments. “Sovereign wealth funds want to link up with the national infrastructure pipeline that we have announced. In the last month, two new sovereign wealth funds asked if they too can benefit. “India has already granted full income tax exemption to the UAE’s MIC Redwood 1 RSC Ltd. sovereign wealth fund investments in infrastructure and other priority sectors.
The Narendra Modi administration offered a tax incentive for sovereign wealth funds in the Finance Act 2020, which made the income earned by these investors here eligible for a deduction when calculating taxable income.
The tax incentive is applied to income earned as dividends, interest, or as long-term capital gains in a company that conducts the infrastructure development business. To be eligible for the tax exemption, the investment must be made before March 31, 2024 and must be held for at least three years.
The national infrastructure pipeline foresees investments worth $ 1.5 trillion, of which 21% will come from the private sector, according to Amitabh Kant. The project portfolio is highly prepared and 40% of the projects are already in various stages of construction, Kant said.
Sitharaman assured the companies that steps are being taken for the rapid resolution of disputes and to eliminate discretion in matters of tax assessment. He said the government will look at the suggestion from industry representatives to have a real-time tax dispute resolution system.
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