Union Finance Minister Nirmala Sitharaman in her budget speech on Saturday announced incentives to encourage foreign spending in India.
Announcing the incentives to foreign sovereign funds, the Finance Minister said, "In order to incentivise investment by foreign government in priority sector, I propose to grant 100% tax exemption to their interest, dividend, and capital gain income in respect of investments made in infrastructure and other notified sectors before 31 march 2024 with the minimum lock-in period of three years."
Sovereign Fund is a state-owned investment fund that invests in real and financial assets such as stocks, bonds, real estate, precious metals, or in alternative investments such as private equity funds or hedge funds. The sovereign funds are invested globally. Most SWFs are funded by revenues from commodity exports or foreign-exchange reserves held by the central bank.
The Finance Minister in her budget announced a plan to boost the infrastructure of India. Some of the key announcements relating to infrastructure are:
This year's Budget assumes tremendous significance as the Indian economy is facing multiple challenges such as a rise in inflation, unemployment, farmer distress, and a dip in GDP growth. The government has taken inputs from multiple stakeholders. Finance Minister Nirmala Sitharaman has also announced a series of reform measures in the last few months to give a boost to the economy.
In the Economic Survey 2019-20 tabled on the floor of the Parliament on Friday, the GDP growth for the next fiscal year has been pegged at 6-6.5 per cent. This is much more than the IMF estimate.