Finance Minister Sees Conspiracy Hurting Foreign Investment, No LTCG Hike Review: Revenue Secretary

Commerce Minister Piyush Goyal has reprimanded the industry for wanting protection and being against free-trade agreements. SEBI chief Madhabi Puri-Buch says she doesn’t want to hand out KYC role to individual entities. In other news, an FAO report says hunger has come down in India after the pandemic years and report says the Centre considering 100 per cent FDI in online gaming.

Nirmala Sitharaman Warns Against Undermining India, Indian Entrepreneurs 

Union Finance Minister Nirmala Sitharaman cautioned about a conspiracy to send a message that India is not safe for foreign investors and that Indian institutions cannot guarantee security to foreign investments, Business Standard reported.

While replying to the general discussion on the FY25 Budget in the Lok Sabha, Sitharaman said, “This is not good. Rumours are being spread that Indian institutions cannot guarantee security to foreign investments, which is really a sad situation.” She said entrepreneurship itself was being made a villain. “Negativity is being spread in society towards all those who do business, and this hatred for business and wealth creators is spilling everywhere,” she added. Read more

No Review Of Long-Term Capital Gains Tax Regime In Medium Term: Revenue Secretary

Revenue Secretary Sanjay Malhotra has ruled out any review of the long-term capital gains (LTCG) tax regime in the medium term, the Economic Times reported.

In a post-budget session at the PHD House of Commerce and Industry, he said the government had studied 1.05 million returns for 2023-24 that showed capital gains from land and building. The effective LTCG tax rate on these was 11.54 per cent on real estate in 2022-23, he said.

The budget announced the removal of indexation benefits for LTCG on properties but slashed the tax rate to 12.5 per cent from 20 per cent, fuelling concerns over an increase in tax burden. The budget raised the tax rate by 2.5 percentage points for listed equity to 12.5 per cent. More here 

Piyush Goyal Attacks Industry Over Holding Up FTAs By Seeking Protectionist Regime

Commerce and industry minister Piyush Goyal has slammed industry at a Confederation of Indian Industry event for hankering for protection that hobbles the Free Trade Agreement (FTA) with the United Kingdom and the European Union, the Economic Times reported.

The minister said FTA is a two-way traffic and reluctance to give tariff concessions may impact the proposed trade deals. At the Viksit Bharat event organised by the Confederation of Indian Industry, he said domestic players seek duty concessions in FTAs, but are not ready to give market access to other countries, and the Indian industry always seeks protection. He also noted how the industry continues to import despite appeals to buy from Indian firms. More here 

SEBI Against Delegating KYC Process To Individual Entities

The Securities and Exchange Board of India has opposed delegating the responsibility of conducting know-your-client (KYC) formalities to individual entities due to fears of “Paytm-like contamination”, Business Standard reported.

In response to a question about centralising KYC across the financial system, SEBI Chairperson Madhabi Puri Buch said, “The current KYC registration agency (KRA) system is widely acknowledged and robust. If you have a validated KYC by a KRA, you don’t need to repeat the KYC process in the capital markets.” KRA is a SEBI-regulated body responsible for conducting and maintaining KYC records within the capital market ecosystem.

A long-pending proposal seeks to implement a similar structure across the entire financial market ecosystem, including banks, insurance companies, and capital market intermediaries. More here 

Hunger In India Has Come Down, Says FAO Report 

Hunger in India has come down from 16.6 per cent of the population in 2020-2022 to 13.7 per cent in 2021-23, the latest report on the State of Food Security and Nutrition in the World (SOFI 2024) showed, Business Standard reported.

The yardstick employed to measure it was the Prevalence of Undernourishment (PoU) by the United Nation’s Food and Agriculture Organisation (FAO). This means that around 39.3 million people have come out of undernourishment between the two periods, NITI Aayog member Ramesh Chand said.

He said that the latest findings of the UN-FAO report, which is based on updated data furnished by the central government, also put to rest the controversy on whether hunger, as measured by the prevalence of malnourishment, has risen in India post-Covid. More here 

Centre Considering 100% FDI In Online Gaming: Report 

The government is discussing whether to permit 100 per cent foreign direct investment (FDI) in online gaming, in a potential relief for the stricken sector navigating hefty tax demands under a legal haze, Livemint reported.

A proposal for 100 per cent FDI in online real money gaming without requiring official approval is being discussed at various government levels, two officials familiar with the matter said. The proposal from the Commerce Ministry's Department for Promotion of Industry and Internal Trade (DPIIT) will exclude games involving betting and gambling.

To be sure, 100% FDI was not banned for online gaming; however, regulatory ambiguity made it difficult for companies to get banking and government-level clearances, making investors wary. A clear green light on FDI may breathe life into the industry, whose revenue has been largely driven by real-money games such as fantasy sports and rummy. More here