The Indian Finance Minister has just announced the Budget for
the year 2014-15. A number of reforms have been proposed including
liberalization of foreign direct investment in defence and
insurance upto 49%, a pass-through regime for real estate and
infrastructure investment trusts, some certainty for foreign
institutional investors (FIIs) and foreign portfolio investors
(FPIs), boost to debt markets, and a clear commitment towards a
stable and predictable tax system. It seems that the focus of the
2014 Budget is on long term structural reforms rather than short
term palliatives. However, some of the low hanging fruits have been
missed out, including clarity on the retroactive tax, general
anti-avoidance rules (GAAR) and a pass-through status for all
categories of alternative investment funds. Hopefully these
will be addressed in Budget 2015.
