BUSINESS

Budget: What's friendly, what's not

By BS Bureau in Mumbai
February 28, 2007 13:47 IST
Finance Minister P Chidambaram presented a mixed bag of proposals for the capital markets on Wednesday.

Positives:

1) PAN to be made sole identification number for all participants in securities market with an alpha-numeric prefix or suffix to  distinguish a particular kind of account;

2) Idea of Self Regulating Organisations (SRO) to be taken forward for different market participants under regulations to be made by Sebi;

3) Mutual funds to be permitted to launch and operate dedicated infrastructure funds;

4) Individuals to be permitted to invest in overseas securities through Indian mutual funds;

5) Short-selling settled by delivery, and securities lending and borrowing to facilitate delivery, by institutions to be allowed;

6) Enabling mechanism to be put in place to permit Indian companies to unlock a part of their holdings in group companies for meeting their financing requirements by issue of exchangeable bonds.

Negatives

1) Rate of dividend distribution tax to be raised from 12.5 per cent to 15 per cent on dividends distributed by companies...

2) ..and to 25% on dividends paid by money market mutual funds and liquid mutual funds to all investors.

BS Bureau in Mumbai
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