The Ministry of Finance (MoF) on 12 Sep 2011 liberalized FII investment in
long-term corporate debt in infrastructure sector. As per SEBI circular CIR/IMD/DF/14/2011 dated August 09, 2011 Qualified Foreign Investors (QFIs) were permitted to subscribe to Mutual Fund Debt Schemes which invest in the infrastructure sector subject to a total overall ceiling of USD 3 billion within the existing ceiling of USD 25 billion. It has now been decided to carve out USD 5 billion out of the remaining USD 22 billion for FII investments in Long-term infra bonds. SEBI is expected to issue notifications incorporating the above changes in the scheme by 15th October 2011.
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Foreign investment in corporate debt in infrastructure sector
Foreign Investment in India
At present, India’s GDP is USD 1.237 trillion, which makes it the twelfth-largest economy in the world at market exchange rates and fourth largest in purchasing power. In the late 2000s, India’s economic growth has averaged at about 7.5% a year. A 2007 Goldman Sachs report has projected that “from 2007 to 2020, India’s GDP per capita will quadruple, and the same will surpass the GDP of the United States of America before 2050.” The country managed a reasonable economic growth of 6.1% during the first quarter of the current fiscal (2009) despite the global financial crisis. India’s annual GDP growth is likely to accelerate to 7.2% in the next fiscal and further accelerate until reaching a pace of about 9% in the year 2012-2013.
India is the seventh-largest country in terms of geographical area, the second-most populous country and the world’s largest democracy in the world. India is a republic consisting of 29 States and 6 Union Territories. India has legislative powers distributed between Centre and the States with a parliamentary system of democracy. The official language of the Republic India is Hindi with English as a secondary official language. There are about 16 officially recognized languages spoken across 28 states in India.
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