Earlier today, the Indian Finance Minister
("FM") announced the Budget for
financial year ("FY") 2018-19
("Budget"). This Budget is expected to
be the last of this Government prior to elections which are
expected to happen over the next twelve months, and the focus was
around ensuring that the rural economy was adequately
benefitted.
Although the last twelve months have seen a significant increase
in investments from Foreign Portfolio Investors
("FPI") and Foreign Direct Investment
("FDI"), the Budget largely focuses on
the domestic audience. Reforms are proposed in the health and rural
sector with emphasis on generating higher income for farmers. On
the tax and regulatory front, the Budget proposals have been
minimal, especially for the global investor community. The biggest
blow has been for the Indian capital markets with introduction of a
long term capital gains ("LTCG") tax at
the rate of 10% on listed equities, which were earlier exempt.
