Government targets $10 billion in FDI to prop up growth rate
New Delhi: The government is planning on increasing the foreign direct investment inflows (FDI) to $10 billion annually from the current level of over $3 billion to meet infrastructural and industrial investment needs. An official release has said that FDI as a supplement to domestic savings, will help propel GDP growth to high levels.

As part of a continuing strategy to liberalise the FDI regime, the inflows would be now be allowed to enter under the automatic route in almost all sectors, except those in a small negative list. The automatic route implies that FDI can come in automatically and the investor is required only to give intimation later to the Reserve Bank of India about proposed activities.

The FDI policy would focus towards resolving post-approval difficulties faced by foreign investors so as to speed up implementation. In this direction, the Foreign Investment Implementation Authority would be mandated to look into the implementation problems with the investors and the concerned central and state agencies.

Besides allowing FDI in most sectors on the automatic route, the other major FDI policy initiative would include 100 per cent FDI through automatic route in all manufacturing activities in special economic zones with a few exceptions. The government would also clear 100 per cent FDI for B2B e-commerce and oil refining.
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Sebi to tighten disclosure norms for mutual funds
Mumbai: Securities and Exchange Board of India (Sebi) is set to tightening disclosure norms for mutual funds with a view to introducing greater transparency in the segment. The regulator is considering a move, which would require mutual funds to disclose the identity of major holders or investors (in terms of value) in any given scheme.

The Sebi argument is that if a major portion of the corpus were in the hands of a few entities, the small investors would stand to lose, if any of these holders pulled out. The higher the concentration of the portfolio in the hands of few, the greater the potential of loss to smaller unit holders if at any point these investors decide to exit, a Sebi official is quoted to have said.

It has been argued that if an investor, holding a substantial portion of the units, exits from a scheme, the scheme’s net asset value would be adversely affected, ultimately hitting the smaller investors, whose investments would get eroded.

More stringent disclosure of investor profiles would help small investors decide whether to stay invested in a scheme where a large portion of the corpus is in the hands of a few investors.
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