Govt wooes American investment in infra fund

The Indian government wooed American firms and other entities in the country to invest in infrastructure debt fund (IDF). Recently, Commerce and Industry Minister Anand Sharma discussed the matter with his US counterpart Michael Froman. Specifically, Sharma sought investments from US pension funds and insurance firms in IDF. In June 2013, government set up the country’s first, $1-billion IDF scheme — the IIFCL Mutual Fund IDF — to mobilise resources from insurance and pension funds. In July 2011, the guidelines for IDF were introduced by the Securities and Exchange Board of India. Interest payment on the borrowings of these funds is subject to a reduced withholding tax of 5 per cent, instead of the current rate of 20 per cent, and income from the fund is exempt from tax. During his meeting with Froman, Sharma has reportedly highlighted steps that have been taken and that would be taken to boost investor confidence in the economy. Sharma also raised the issue of the proposed immigration reforms that might impact Indian services sector and steeply increase visa fees, reports indicate.