In an effort to ‘catapult’ the country to an economy of $5 trillion, the Government of India, under the guidance of Finance Minister Nirmala Sitharaman, will be decriminalizing some acts such as money laundering and income tax acts. This will be a part of the Budget 2020.
In addition to that, there are reports that have revealed the Government’s plans to allow direct listing of Indian companies on foreign exchanges for emerging startups to attract foreign investors.
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Indian Govt To Decriminalize Income Tax Acts, Money Laundering Acts: Here’s The Reason
Indian Government is planning to decriminalize the Income Tax Act and the Prevention of Money Laundering Act (PMLA) in order to boost confidence in business. She also remarked that these steps are being taken to turn India into a $5 trillion economy. She explained that decriminalizing corporate laws, settling tax disputes and rapid privatization of state-run firms are the steps to reach this goal.
FM Sitharaman said, “I have gone through this (Companies Act) with a comb. We are working to decriminalize companies and ensure that no other Acts including Income Tax Act and PMLA, have such provisions.”
She was talking at the Nani Palkhivala centenary celebrations in Chennai. There will be amendments made to about 46 penal provisions for removing criminality or reducing punishments only to a fine.
What we find curious is that it hasn’t been very long since the Government declared that tax invaders won’t be let off the hook only by paying a fine.
Government To Allow Direct Listing of Indian Companies on Foreign Exchanges
Citing the progress and profits of emerging startups, the Indian Government is proposing rules to allow firms to get listed overseas.
As per the new proposed rules, those Indian companies that are unlisted in India will also be able to list overseas. This listing can be done through a fresh batch of shares, or by selling the existing holdings. As per reports, this will be helping startups the most by opening up a wide array of investors.
The rules that are in place right now state that only the companies that are listed on Indian stock markets can list abroad.
Generally, Indian firms choose to attract foreign investors through the American Depository Receipt (ADR) or Global Depository Receipt (GDR). Some big names, such as ICICI Bank, Infosys, HDFC Bank and Reliance Industries are a few of these.