The Union Budget for 2015-16 is likely to kick-start finance special economic zones (SEZs), the first of which is to come up in the Gujarat International Finance Tec-City (GIFT) in Ahmadabad. With only 10 days remaining for the Budget to be presented in Parliament, the finance ministry has sought public comments on far-reaching recommendations, such as tax breaks and lenient regulations for financial firms in these SEZs, made by the National Institute of Public Finance and Policy (NIPFP).
The work on drafting regulations for finance SEZs has already started with consultation with regulators including Securities and Exchange Board of India (Sebi), Reserve Bank of India (RBI) and Forward Markets Commission (FMC).
“To draft the final regulations for financial SEZs, the finance ministry-commissioned concept note would be taken into consideration after feedback from the stakeholders,” said a person close to the development.
Finance SEZs would help both Indian and foreign companies raise funds. Laws for these, including for litigation, would be separate from those outside these zones. The recommendation is to exempt these from foreign exchange controls. The report also suggests a separate regulator for these.
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